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2013 GC International Yearbook Greeting

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Adecco Group AYA Bank Air France KLM Arab African International Bank Audi Bayer Bosch Bradesco Business Keeper Camfil Camposol Coca-Cola Deutschland A growing number of businesses in all regions rec- Consolidated Contractors Company ognize the importance of reflecting environmental, Coop social and economic considerations in their operations Copeinca and strategies. Deutsche Telekom H.E. Ban Ki-moon, UN Secretary-General EDF Group Green Delta Insurance More than 7,000 companies have embraced the Global HOCHTIEF “Compact principles. ITOCHU ManpowerGroup Now, the challenge is to move from incremental progress Medcom to transformation – in markets and societies alike. MTU Aero Engines Nestlé … Governments and the UN are now working to acceler- Novo Nordisk ate momentum to achieve the Millennium Development Prosegur Goals and set global priorities for the post-2015 period. Ricoh Royal Bank of Scotland Group Saga Furs Global Compact participants are already deeply invested. SK Teck Scores of country and sectoral consultations are collecting Thales business views and perspectives. The TMS Group TÜV Rheinland The Global Compact Leaders Summit in September is an Volkswagen opportunity to show the world how business and the UN Weidmüller can work together towards common goals in critical areas, such as climate change, energy, water, food, women’s

Global Logistics Partner: empowerment, children’s rights, decent jobs, and Deutsche Post DHL education.

The Global Compact International Yearbook is a product of macondo Media Group in support of the UN Global Compact and the advancement of corporate sustainability globally. All regular participants of the UN Global Compact with an active reporting status are allowed to apply for participation in the International Yearbook. While the yearbook is developed in cooperation with the Global Compact Office, sponsorship by com- panies does not constitute a contribution to the Foundation for the Global Compact. Financial contributions are not collected on behalf of the ” Global Compact Office. Rather, they are exclusively used to fund the development of the International Yearbook 2013 by macondo Media Group. Global Compact International Yearbook 2013 3 Agenda Keynote

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The UN Global Compact Leaders Summit, held every three years, is Caring for Climate – the world’s largest climate action platform involving well timed to take advantage of the momentum in favor of corporate 350 companies from 65 countries – convened a private meeting at the sustainability that has accelerated rapidly since the 2012 UN Confer- December 2012 climate change talks in Doha. The meeting featured the UN ence on Sustainable Development (Rio+20). Secretary-General, UN Environment Programme (UNEP) Executive Director Achim Steiner, and UN Framework Convention on Climate Change (UNFCCC) On the sidelines of Rio+20, nearly 3,000 representatives of companies and Executive Secretary Christiana Figueres. The event was considered a key event other stakeholders took part in the Corporate Sustainability Forum organized at COP 18 and drew more than 60 senior representatives from business, civil by the Global Compact. The Forum showed business not only supporting the society, government, and the UN. efforts of governments to tackle global priorities, but also bringing to the table inspiring examples of imagination, innovation, and collaboration. For COP 19, Caring for Climate – led by the UN Global Compact, UNEP, and UNFCCC – is expanding its role. It will hold a Business Forum at the With CEOs and representatives of the 7,500 firms and 3,500 civil society November climate talks in Warsaw, with the aims of scaling-up business organizations participating in the Global Compact meeting in New York on innovation, encouraging ambition in public and private policies on climate, September 19 - 20, 2013, the opportunity is ripe for scaling-up corporate and fostering collaboration among corporations, investors, civil society, the sustainability efforts to tackle our world’s most pressing challenges. public sector, and the UN.

The following week, the UN General Assembly will consider the follow-up to Corruption is another challenge at the heart of a wide range of issues, includ- Rio+20, including a development agenda to succeed the Millennium Develop- ing governance, equity and inclusiveness, sustainable economic growth, and ment Goals, as well as the possibility of a new set of Sustainable Development the quality of infrastructure investment. Goals. The UN Secretary-General will report to UN Member States his own vision for the future. His plan has been informed by a Global Compact report The year 2013 may be remembered in many quarters for our global call to that is the result of one of the most comprehensive consultations and surveys companies to take greater steps to combat corruption. The Call to Action to Georg Kell, on sustainable development ever held in the business community and which Governments from the Private Sector on Anti-Corruption and the Post-2015 Executive Director, UN Global Compact was conducted over the course of a year. Development Agenda urges Global Compact business participants to join forces with governments and encourages them to create robust disclosure, The vision of what the world could and should look like in 15 or 20 years from transparency, and enforcement mechanisms that contribute to sustainable now – and especially how businesses can engage and be part of that movement – development – particularly in the area of public procurement. As part of the is integral to the Global Compact Leaders Summit agenda. Most significantly, year-long global campaign, the Call to Action is showcasing the private sector’s we are unveiling, fine-tuning, and validating a new architecture for business commitment to transparency and anti-corruption as the UN works on a new engagement with the global priorities contained in the future UN agenda. set of global development priorities.

Secretary-General Ban Ki-moon is once again the Chair of the Global Compact These few examples of the range of recent UN Global Compact activities Leaders Summit. He also convenes a high-level Private Sector Forum, which indicate that it has been a big year for action, with many possibili- in 2013 is focused on Africa. Heads of state and government, CEOs, leaders ties for the future. With heightened business action in support of the from civil society, foundations, and the UN are taking part in the Forum and development agenda resulting from the Leaders Summit, we expect to will address some of the key themes for future development on the continent – continue this strong advance. education, employment, empowerment of women, and innovative financing.

Many of the challenges at the top of the UN’s agenda moving forward are closely linked with climate change.

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GREETING Human Rights 74 Air France KLM 3 H.E. Ban Ki-moon, 76 Ayeyarwady Bank United Nations 80 Bayer Secretary-General 82 Consolidated Contractors Company 84 Green Delta Insurance 86 Medcom 88 Novo Nordisk 90 Sakhalin Energy KEYNOTES 92 SK 4 Georg Kell, Executive Director, 94 Teck UN Global Compact 96 The TMS Group Labour Standards Roman Dashkov, CEO, 10 98 Adecco Group Sakhalin Energy Investment 50 100 Bosch Company Ltd. CSR in Africa 102 ManpowerGroup 32 Dr. Frank Appel, CEO, 104 Saga Furs Deutsche Post DHL 8 106 Weidmüller Environment 176 Dr. Kurt Bock, Chairman of the Stakeholder Management Board of Executive Directors, 110 Audi BASF SE 112 Camfil 114 Deutsche Post DHL 174 118 Deutsche Telekom 120 EDF Group Integrated Reporting 122 Grundfos 126 MTU Aero Engines 128 Sakhalin Energy STAKEHOLDER MANAGEMENT CLIMATE CHANGE CSR IN AFRICA Anti-Corruption

130 Business Keeper 12 Stakeholder Management – 34 The Case for a Clean Revolution 52 Africa’s Natural Assets: An Introduction Mark Kenber The Struggle for Sustainability 132 Thales Klaus Lintemeier, Prof. Dr. Lars Fred Nelson CSR Management Rademacher, and Dr. Ansgar 38 The Carbon Atlas 136 BASF Thiessen 56 Good Practices: 140 Coca-Cola Deutschland 40 The World Is Awaiting Innovation Cotton Made in Africa, 142 HOCHTIEF 18 Managing Corporate Legitimacy Prof. Dr. Dr. h.c. Hans Joachim World Cocoa Foundation, and the UN Global Compact Schellnhuber Sustainable Energy Africa 144 MAN Dr. Dorothée Baumann-Pauly 148 Ricoh and Prof. Dr. Andreas Georg 42 What Business Has to Gain 58 The UN Global Compact 150 Volkswagen Scherer from Engaging in International in Africa Development Climate Policy 152 Camposol 22 The Global Compact as a Julie-Anne Richards 60 “Renewed Energy for Multistakeholder Initiative Women’s Empowerment” INTEGRATED REPORTING 184 When Does It Pay? 153 Copeinca Prof. Dr. Andreas Rasche 46 Join Our Clean Generation Nomcebo Manzini Linking Carbon and 154 Coop Movement! 178 Integrated Reporting: Financial Performance 156 ITOCHU 25 Responsible Lobbying Dr. Bertrand Piccard 63 CSR in South Africa Old Wine in New Bottles? Prof. Dr. Timo Busch 158 Nestlé Dr. Stephanos Anastasiadis and Prof. Ralph Hamann Dr. Lothar Rieth and Dr. Sigrun M. Wagner 48 Portrait: Caring for Climate Christoph Dolderer 188 Unpacking the CSR-CFP Link 160 Prosegur 66 CSR and Development in Africa: Francesco Perrini, 162 Sanofi 28 Which Form of Dialogue Is Public and Private Actors in 182 What Are the Benefits of Angeloantonio Russo, 166 TÜV Rheinland Suitable for Which Purpose? the Mining Sector Integrated Reporting? Antonio Tencati and Financial Markets Prof. Bonnie Campbell Nicolette Behncke Clodia Vurro 168 Arab African International Bank 170 Bradesco 172 Royal Bank of Scotland Group Agenda Stakeholder Management

STAKEHOLDER MANAGEMENT

Experience shows that long-term success can be achieved when joint efforts are undertaken to get solutions underway. That is why stakeholder dialogues are increasingly proposed as an approach to problem-solving. This chapter gives a comprehensive insight to various aspects of stakeholder management.

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Q: Your stakeholder engagement is based on the commitments set down liaison officers, and information centers); grievance mechanisms; partnerships; in various documents. Can you explain this approach to us? and public reporting. All of them have proved their efficiency and value, both for business and stakeholders during all phases of the Sakhalin-2 project development. Mr. Dashkov: As the company is convinced that regular and meaningful engagement is an especially important element of suc- The particular tools include public, focus, and individual meetings; workshops; cessful operations, Sakhalin Energy has been proactively sharing interviews; open hours, etc. Our tools are not something static – they are updated information and consulting with stakeholders since the start of the based on internal and external verifications and stakeholders’ feedback as well. Sakhalin-2 project. We have implemented training workshops for suppliers and contractors about the company’s requirements in the area of corporate social responsibility. A few years The company’s stakeholder engagement is based on its commitments, as ago, the company established a network of information centers in communities set forth in the Statement of General Business Principles – a key located near our facilities. Another example of following public recommendations company document – and the Code of Conduct, which includes is the arrangement of information tours to the company’s assets. the rules and regulations necessary to observe said Principles. De- tailed information about the commitments has been outlined in Invariably, we rely on respectful, fair, open, transparent, and culturally appropriate documents such as Sustainable Development Policy, Human Rights engagement as a key principle. Policy, Commitments and Policy on HSE and Social Performance, and Social Performance Standard. Your Indigenous Minority Program is a concrete example. Can you describe the plan?

All these documents define the engagement strategy, principles, The Sakhalin Indigenous Minorities Development Plan (SIMDP) is a classic tri-sector processes, mechanisms, and tools and are available to the general partnership implemented by civil society, business, and government. public. Our day-to-day operations are outlined in the annual Public Consultation and Disclosure Plan. This program is based on international standards concerning indigenous peoples, for example the “free, prior and informed consent” principle provided in the UN The strength of Sakhalin Energy is that all these documents are Declaration on the Rights of Indigenous Peoples and in the Performance Standards incorporated into the corporate management system and the per- of the International Finance Corporation. formance of engagement activities is under close control by man- Roman Dashkov, CEO, agement. Moreover, general awareness on engagement is included Active participation of indigenous representatives in the Plan management as well Sakhalin Energy Investment Company Ltd. in the mandatory corporate training program. In order to ensure as in its development and implementation is a critical component of the approach of compliance with the company’s requirements, special trainings are the three partners. Such participation requires sensitivity toward indigenous people’s conducted for contractors as well. culture during engagement; recognition of the need for achieving consensus in the context of both traditional and innovative structures, values, and practices; and also The engagement outcomes are available in our annual Sustainable the planning and use of a multi-aspect approach that considers ethnic, geographic, age- Development Report and Public Consultation and Disclosure Report. related, social, organizational, and gender characteristics. What is more, the partners put special emphasis on the transparency of actions, timely exchange of information, Which mechanisms and tools do you use and what are your experiences with and shared responsibility. All that has resulted in the implementation of more than these? 400 projects in the areas of traditional economic activities, education and health, capacity-building, and the preservation of traditional culture and indigenous Stakeholder engagement mechanisms and tools are selected based languages. In so doing, the decision to support projects is made directly by the on the engagement goals and dependent on the stakeholder group. indigenous representatives. Special attention is given to affected communities and vulnerable groups. SIMDP has been successfully implemented for more than seven years, during which time we have gained tremendous knowledge and learned how to become We implement five basic complementary and interdependent mecha- much more flexible. The Plan is not an authoritative doctrine, it is a living nisms: impact assessment consultations; three-level system of direct mechanism that addresses the changing demands of society and develops communication with communities (including company, community itself accordingly.

10 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 11 Agenda Stakeholder Management STAKEHOLDER MANAGEMENT – In the future, the currently still dominant focus on shareholders interests – recognizing those interests, dealing with them, and target groups will no longer be able to cope with the rapid and managing them – is essential. The interests of (often An Introduction pace of change in the business environment. Shareholders critical) social groups, in particular, are frequently articulated are an important stakeholder group for sustainable business to businesses and pursued in public – sometimes with great success, but not the only such group. Nowadays, the task of a professionalism. This calls for corporate management that future-proof and sustainable strategy is rather that of weighing works through – and not against – such interests in order up the requirements of politics, society, business, and science to enable sustainably effective corporate decision making. and aligning them with corporate goals. The so-called license to trade depends not only on dialogue with all relevant interest Over the long term, actions that conflict with perceived social groups and opinion leaders: Stakeholders and target groups do values will jeopardize an organization. Conversely, potential not simply expect information about activities and decisions gains can only be realized if stakeholders’ interests are consist- from businesses, they want instead to be actively involved ently integrated into corporate strategy. As R. Edward Freeman and integrated in discussions and decision-making processes. argues, stakeholders’ interests increasingly converge over time. This suggests a developmental process: If stakeholders’ Businesses and institutions are therefore confronted with a interests align ever more closely with each other, then the dual task: (1) What are the (new) procedures that we need to stakeholders in question will gradually – and naturally – establish for the involvement and participation of external come together, forming alliances in the worst-case scenario. and internal stakeholders? (2) What kinds of interactive and If the social momentum achieved by these cooperating actors communicative innovations might take us beyond informa- grows proportionately, these actors may then be able to assert tion exchange and simple dialogue with stakeholders and their interests successfully, for example through legislation. create added value? In most cases, this is the least desirable outcome, because it restricts the company’s room for maneuver. It follows that It is these challenges that are investigated in a new report, companies need to address stakeholders’ interests and inte- for which we interviewed around 100 stakeholder managers grate them into their business processes. If companies are not from Germany, Austria, and Switzerland. The study is titled proactive in this way, they may find themselves compelled “Stakeholder Integration: the contribution made by corporate to act due to new state regulations. Over the medium term, communications and sustainability management to value crea- management of stakeholders becomes management for stake- tion.” It is a project being carried out through a cooperation holders. This would probably represent the most radical shift between Lintemeier Stakeholder Relations, Knobel Corporate imaginable for today’s managers. Communications, and the MHMK (Macromedia University for Media and Communication) and serves as a descriptive analysis Stakeholder management in companies has been imple- of the current situation. It provides unique insights into the mented mainly in a descriptive manner until now; interest structure of stakeholder management; identifies its substan- groups are, at best, informed about corporate plans. How- tive and methodological foci; describes its fields of activity ever, the potential to involve them in strategic discussion and how its operative managers understand their roles; and and decision-making processes goes much further. In the identifies different models of integration of internal as well as future, a more normative perspective and the associated external stakeholders. The companies surveyed were divided concept of shareholder value will gravitate to the center of By Klaus Lintemeier, Prof. Dr. Lars Rademacher, and Dr. Ansgar Thiessen into four roughly equal groups according to sales volume: up to corporate activity – with the recognition that stakeholders € 100 million, up to € 500 million, up to € 5 billion, and over are a constitutive element of business success. Their strategic € 5 billion. Here we describe the most important findings from and systematic integration will become one of the decisive the results of the study. factors in any such success. The landscape of business and enterprise policy is subject risk-management and are increasing their regulatory re- to almost unparalleled change. An ever-increasing major- quirements on businesses and commercial sectors through Paradigm shift: From shareholder value to stakeholder The digitalization of communications is strengthening ity of corporate and institutional management boards find their legislative powers; NGOs draw attention to abuses and value? networks among stakeholders themselves operating in a networked world of interests and irregularities by means of effective and high-quality media opportunities for influence. In addition to primary stakehold- campaigns. At the same time, the market place of public The philosophy of corporate leadership is undergoing a para- The reasons for this lie in a coming of age and an increase in ers such as shareholders, customers, suppliers, and employees, opinion is going through fundamental and rapid changes: The digm shift. In the future, a strong orientation toward share- autonomy in those stakeholder groups that, until now, had secondary and tertiary stakeholder groups are increasingly established media are beginning to lose their capacity to lead; holders among managers will be complemented by a greater been unable to properly articulate or assert their interests vis making regulatory, social, political, and ethical demands on opinions are formed in ways that are more direct, digital, and emphasis on a stakeholder approach, one which recognizes à vis companies and institutions. businesses. decentralized; and transparency and dialogue are the order that the providers of capital represent a group with legitimate, of the day for almost all businesses. Communications with but not exclusive, claims on companies. The rapid pace of New channels of communication have given rise to greater Public and social stakeholder groups are increasingly seek- external as well as internal stakeholders rely increasingly on change in the business environment and the need for speed powers of interest assertion, which can hamper – or even ing to bring their influence to bear on corporate decision substantive content, and close and resilient relationships with and flexibility in strategic decision making mean that early prevent – the implementation of strategic decisions such making and investment. Politicians have discovered social stakeholders are an important factor for success in business. involvement in the strategic process of groups with legitimate as investments in infrastructural measures or bringing new

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products onto the market. Legitimate interests are no longer were under attack around the time of the millennium, today Group One : Stakeholder management organized as being articulated solely by opinion-leading stakeholders such it is increasingly the so-called hidden champions – classic autonomous division as “the politicians,” “the media,” “the banks,” or “the NGOs,” business-to-business companies – that are being closely but by local communities, parents, civic leaders, investors, as- monitored by critical stakeholder groups. The objects of this This group is relatively small, comprising only 7 percent. sociations, teachers, doctors, and ratings agencies. Alongside media attention are no longer only companies from the The companies surveyed enable no conclusions to be drawn the so-called primary stakeholders, there are an increasing food production, financial, energy, and automobile sectors, Stakeholder management within on whether the establishment of an autonomous division is numbers of secondary and tertiary stakeholders who are put- but also include components suppliers, food retailers and dependent on the number of employees (e.g., predominantly ting forward clear positions and convincing cases. delivery companies, raw materials suppliers, and mechanical companies is organized according in large companies), on the sector (e.g., predominantly in engineering companies. to three different categories: pharmaceutical companies), on turnover (e.g., predominantly Moreover, responsible, sustainable, and ethical corporate leader- in companies with a large turnover), or on the organizational ship is no longer generally regarded just as a social ideal but as This trend is going to continue. Critical stakeholder groups “stand alone,” “dialogue-based,” location of stakeholder management (e.g., predominantly as a commercial necessity. Sustainability and improved efficiency, are expanding their horizons beyond consumer and environ- and “strategic” a C-level function). previously believed to be in conflict, are now recognized as mental concerns to take in the entire business supply chain. joint prerequisites for competitive advantage. Whereas in the past, questionable product or contractual is- The reason for this lies in the fact that the professionalization sues dominated the debate, today all the links in the corporate of stakeholder management is only now slowly beginning. Future importance of stakeholder management value-creation chain are scrutinized under ecological, ethical, In the coming years, therefore, companies will have to work American companies with European headquarters in Germany, and sustainability criteria with the aim of comprehensive risk- out for themselves the answer to the question of whether the Austria, or Switzerland, for example, demonstrate a more The reason for the high importance attached to stakeholder and sustainability management. It is in this spirit, too, that organization of stakeholder management should be central frequent propensity to locate stakeholder management in an management by small and medium-sized enterprises lies in NGOs now publicly proclaim that they will no longer restrict or decentralized and how it should therefore relate to already autonomous division. In international comparison, the manage- the increasing pressure that stakeholder groups are now ex- their attacks to major companies but will deliberately include established corporate divisions. The results enable a funda- ment of stakeholder interests in the companies surveyed here erting on such firms. Whereas it was mostly big players who small companies and suppliers. mental division into three possible categories. is predominantly the responsibility of the communications division. American experience demonstrates that a targeted integration of process controls within a dedicated corporate division is crucial to the success of stakeholder management.

Group Two: Stakeholder management located in dia- Organizational forms of logue-based corporate functions. stakeholder management In approximately one-third of companies, stakeholder man- agement is organized in dialogue-based corporate functions such as corporate communications or public affairs/corporate affairs. The reasons for this are mainly “historical.” Both cor- 7 % porate communications and public affairs/corporate affairs are responsible for communications tasks conducted by way of dialogue. However, the stakeholder approach is interpreted in the first instance only as an extension of acknowledged legitimate interest groups beyond the media, customers, employees, and capital markets. We demonstrate below that 48 % 32 % dialogue is understood as a channel for information and not as a form of consultation.

Group Three: Stakeholder management located in more strategic organizational units.

In this group, stakeholder management is accorded a greater 13 % priority within corporate leadership and thus acquires the status of a management function. It is explicitly not detached from other corporate divisions (“stand alone”), nor is it restricted to its purely communications elements (“dialogue-based”). stand-alone Firms that organize their stakeholder management in this way incorporate a stakeholder perspective in their discussions and dialogue-based decision-making processes. Here, stakeholder management is strategic integrated on the management level, and it is precisely there multiple divisions that its contribution is made.

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Stakeholder management therefore has its greatest significance it is above all relationship management which plays the big- 10 theses on the stakeholder management of as an essentially defensive risk-management measure (67 %). gest role. In life science (57 %) and in the technology sector Its claims of being a tool for corporate reputation-building are (56 %) by contrast, stakeholder management is principally the future based, above all, on the understanding of stakeholder relations an obligatory element in the decision-making and planning primarily operating through the media: Media and commu- process. This shows that there are indeed differences between nications divisions often explain their roles in the firm with sectors in terms of the significance and application of stake- reference to their contributions to reputation management. holder management.

In conclusion, we would like to put forward – as the quintessence of the findings of our However, stakeholder management has its greatest impact as The reason for these differences in (the case of) pharmaceutical study – the following 10 theses on the future development of stakeholder management. a strategic instrument for defending a corporation’s ability companies is that they are dependent on systematic stake- to maneuver freely. This is especially the case when all of holder management in the licensing process for drugs. And the relevant stakeholders and opinion leaders are brought the retail sector too has great experience, going back over a 1. The stakeholder approach goes well-beyond simple 6. Firms will adapt the content of their mission into a process at an early stage. Among those charged with long period, in the management of complex stakeholder rela- reputation management. statements to the stakeholder approach. this responsibility in companies, 36 percent see stakeholder tions, on account of its business model. This relies heavily on management as playing a role in conflict management in stable relationships and efficient processes between producers, 2. The early integration of stakeholders optimizes 7. Stakeholder management will move away from its cases where there is resistance from critical stakeholder suppliers and consumers. corporate processes. focus on critical interest groups. groups. A failure to involve critics would lead to ignorance of relevant viewpoints and a misperception of influencing In contrast, the energy policy debate in all three countries 3. Stakeholder management will become more closely 8. Corporate communications will free itself from its and campaigning capacities. This effectively also means that surveyed reflects the role of stakeholder management in con- aligned with the supply chain. obsession with the media. stakeholder management must, in the future, become an ob- flict management and lobbying. In the energy sector (59 %), ligatory element of decision-making and planning processes stakeholder management means principally dealing with critics 4. The organization of stakeholder management will be 9. Internal stakeholder communications will step out (currently 37 %). and involving critical interest groups. This also applies to the professionalized, and interface problems will become of the shadow of external communications. technology sector (50 %). Here, stakeholder management is more complex. Significant variations in views of the role between sectors known almost only in the context of project management. So when large investments need to be made in IT infrastructure, 5. Firms will provide more explanations and 10. There will be a convergence between normative and The perceived role of stakeholder management varies, some- internal stakeholders often have to be integrated throughout, justifications for their decisions and plans. strategic issues in corporate governance. times greatly, between sectors. In the retail (92 % ), life science and from an early stage, in conception and implementation (71 % ), banking and insurance (72 %), and energy (68 %) sectors, by means of an appropriate project structure.

Stakeholder management has a resource problem Around 10 percent of those firms with only one full-time post have a turnover in excess of € 5 billion (4.16 million Swiss One indicator of the significance of a corporate function is Francs) and employ more than 10,000 workers. In these firms, its financing, or the number of full-time staff posts assigned stakeholder management is either part of a broader corporate to it. Roughly 40 percent of the firms surveyed have created function or is conceived as a temporary project. a full-time post for stakeholder management. A further 40 percent allocate between two and five posts to stakeholder All together, the number of full-time posts allocated to stake- management. holder management, at between one and five, is small in comparison with the number allocated to communications Firms with higher annual turnover tend to allocate greater and public affairs divisions. The increasing importance of resources to stakeholder management. The highest staffing stakeholder management has not yet had a substantial impact numbers are to be found in affiliate companies (33 %), strategic on staffing structures. management holding companies (29 %), and in autonomous corporate divisions (14 %). The number of full-time posts allo- The management of stakeholder interests has only cated to stakeholder management in financial and intermediate limited positive impact on the implementation of holding companies is just as small as that in sales and distri- corporate plans Klaus Lintemeier is CEO, Partner, Dr. Lars Rademacher is Professor Dr. Ansgar Thiessen is Managing bution companies. The latter figure is particularly striking for and Founder of the communications of Corporate Communications and Director of Knobel Corporate Communi- Switzerland, where multinational companies with local sales In 67 percent of the firms surveyed, stakeholder management consultancy Lintemeier Stakeholder Course Leader for media management cations AG, Steinhausen, Switzerland. and distribution subsidiaries are particularly well represented. is understood as relationship management, as a strategic tool Relations, Munich / Vienna. at the MHMK in Munich. He advises family firms, medium-sized Systematic stakeholder management is not carried out in the providing a safeguard against corporate risks. In 64 percent He advises on strategic issues, His research areas are CSR; compliance enterprises, and international holding subsidiaries. The responsibility for this function usually remains of the firms surveyed, it is employed in the building and stakeholder communications, and and reputation; strategic and leadership companies in situations critical to their with the group holding company located abroad. development of corporate reputations. change management. communications. success and on strategic processes.

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Managing Corporate Legitimacy and the UN Global Compact

In this article, we explain why managing legitimacy is vital for corporations and how business firms can employ strategies to maintain their legitimacy. We then discuss the organizational capacities that each legitimacy strategy implies and point out their inherent tensions. Based on the results of an empirical study, we show how two large corporations have handled these tensions and successfully introduced organizational prerequisites for managing legitimacy. In the final part of this article we elaborate on how participants of the UN Global Compact can use the initiative to strengthen their legitimacy.

By Dr. Dorothée Baumann-Pauly and Prof. Dr. Andreas Georg Scherer

Corporations can no longer easily control their public image threatened by many critical topics (i.e., corruption, social legitimacy); they can (2) adapt to the social context, that is, concerted efforts of all corporate functions. Particularly the by means of public relations and marketing. Clearly defined issues, environmental depredation) to which practitioners meet the expectations of their most important stakeholders corporate communications function must be closely aligned corporate reporting requirements, rigorous third-party moni- have to respond. (cognitive legitimacy); and (3) they can engage in dialogue with with all other activities in order to effectively shape public toring processes, and multiple media resources of watchdog the corporate critics and search for a consensus-based solution perceptions. To simultaneously engage in a dialogue with crit- organizations help to shed light on actual business practices. The management literature uses the legitimacy terminology to to the issues that cause the legitimacy challenges (moral legiti- ics (moral legitimacy) or to silently adapt to social demands The increased transparency with regard to corporate conduct describe the social acceptance of an organization. Legitimacy macy). All three strategies are employed to maintain corporate (cognitive legitimacy) might undermine the effectiveness of has also enabled a larger and more diverse group of corporate is considered an essential resource for the survival of the legitimacy or to restore it after a crisis. Research suggests that manipulation because these activities dilute the strategy’s stakeholders to voice opinions and formulate demands. In organization. Thus, the legitimacy of a corporation is chal- to manage legitimacy successfully, corporations must be able uncompromising focus. By contrast, companies that highlight particular, large brand name companies in sensitive consumer lenged when their operations are perceived as inappropriate to activate multiple legitimacy strategies simultaneously. their stakeholder dialogue-orientation risk undermining the goods industries (like food or textiles) are now constantly and undesirable within their respective social context. Our Greater flexibility in the application of different legitimacy dialogue’s credibility should their manipulation strategies under public scrutiny. For corporations, this situation creates interviews with corporate practitioners showed that today strategies allows the corporation to develop better responses become public. Media reports have recently exposed the new management challenges. To ensure the social acceptance the majority of legitimacy challenges have their roots in the to the constantly changing, multi-layered, socially complex extensive lobbying activities of companies that have built of their business (corporate legitimacy), heterogeneous and sustainability context. So, while some corporations refer to corporate environments of large multinational corporations their public image around a dialogue-oriented corporate CSR often contradictory stakeholder demands need to be managed. their “corporate responsibility / sustainability program,” and that operate in various jurisdictions and cultural settings, as program. The contradicting objectives of the lobbying strategy their “reputation management,” they are in fact more broadly well as helping them to face the demands of a multitude of called the sincerity of their corporate promises in the context Corporate legitimacy as a vital resource for corporations managing corporate legitimacy. different stakeholders. of CSR into question and resulted in a severe (legitimacy) crisis.

Discussing “legitimacy” with corporate practitioners is tricky According to Mark Suchman, corporations can respond to However, each legitimacy strategy is associated with a specific Given the obvious difficulties of creating organizational because the term itself is not widely used by business people legitimacy challenges in three ways: They can (1) provide set of organizational capacities (e.g., organizational structures, capacities for different legitimacy strategies simultaneously, and typically provokes a spontaneous defensive reaction. benefits to their constituencies, or at least give the impression procedures, and competences), and combining different strat- we asked how organizations that are highly exposed to public However, in the business context, legitimacy refers to the of being beneficial by way of manipulating the perceptions of egies may require seemingly incompatible organizational scrutiny design organizational structures and procedures to corporate “license to operate” – this license is potentially the audiences with impression management and PR (pragmatic capacities. For example, a manipulative PR strategy requires manage these tensions. We therefore selected two large brands

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that produce consumer goods in sensitive industries and ana- (buffering), whereas others do so to truly engage with these Managing corporate legitimacy with the Global Compact lyzed how they manage heterogeneous stakeholder demands. stakeholders (bridge). In the context of managing legitimacy, we Company A (a German sportswear company) and Company expect that with respect to both internal and external boundary Companies that are exposed to public scrutiny are typically B (a Swiss coffee company) operate in highly competitive spanning, bridging is preferred to buffering because it enables aware of the risks associated with losing their corporate legiti- business environments and they are both in the spotlight of the organization to switch legitimacy strategies seamlessly when macy. They develop antennas sensitive to societal expectations critical watchdog organizations. Interviews were conducted appropriate, without appearing inconsistent. and engage in boundary-spanning activities to better assess with the department heads of both companies to learn how the adequateness of their actions. their functional subunits respond to the specific stakeholder The analysis of both empirical cases shows increased boundary- expectations of their department, and how they coordinate spanning activities, yet major differences exist with regard to Participating in the Global Compact provides ample opportu- their responses with other departments. Furthermore, we the type of boundary spanning on the internal and external nities for boundary spanning. However, to avoid a backlash were interested to learn how corporate representatives assess dimension. Company A uses boundary spanning to bridge for corporate legitimacy, corporations need to respond to the the adequacy of their responses (e.g., What kind of organiza- between external organizations and to buffer from internal Global Compact’s critics who argue that the initiative allows tional platforms exist to monitor and discuss changing social critique; Company B focuses on external buffering, that is, the for “blue / green washing.” To benefit from participation in expectations?) and how the assessment results are taken into company tends to avoid interactions with external stakehold- the Global Compact, corporations must show full engagement consideration in internal decision-making (e.g., What kind ers, while emphasizing internal bridging. We explain these with the initiative’s learning platform, contribute to its further of inter-departmental platforms exist to coordinate response differences with the different leadership styles and different development, and engage with its stakeholders (bridging). strategies?). corporate histories. Company A’s leadership continuously pushes the company to adopt a collaborative approach in Public trust in business is at a low point, and engaging in Organizational capacities for managing legitimacy order to advance the company’s sustainability strategy. This isolated CSR projects or polished PR campaigns as a quick includes regular exchanges with critical external stakeholders. fix to appease stakeholders will not suffice to restore it. Es- At both companies under review, we observed a high level of The CEO of Company A argued: “Well, first of all, I think that tablishing the organizational prerequisites for managing activities that organizational literature has termed “boundary you need to have dialogue in order to understand what the corporate legitimacy, however, provides a basis for juggling spanning.” Boundary spanning means expanding the corporate critical issues are. If you don’t engage with your critics, you conflicting stakeholder demands in highly complex business perspective by reaching out to organizations or individuals will never find out what their point of view is.” environments. outside of the corporation (“external boundary-spanning”) in order to absorb and process new challenges, solutions, views, The CEO’s vision also drives the sustainability agenda. Inter- or ideas. Boundary spanning can also take place inside the nally, organizational structures and procedures were set up organization by increasing inter-departmental coordination to ensure the proper implementation of the leader’s vision. (“internal boundary-spanning”). Both dimensions of bound- These implementation structures, however, are centralized ary spanning (internal and external) are critical for managing and designed to support the top-down strategy. They leave legitimacy. External boundary-spanning enables the corpora- little room for critical reflection or decision making by sub- tion to monitor shifting societal trends in various regions and ordinate organizational members. The leadership’s vision audiences. Internal boundary-spanning ensures that societal is fully supported, however, because past experiences with expectations are discussed with members from other depart- legitimacy crises have proven that the engagement with ments, the adequacy of various response options are assessed external stakeholders is most effective for repairing and jointly, and actions are coordinated. maintaining legitimacy.

Boundary spanning is a concept that was developed in the con- Company B, in contrast, only reluctantly opens up their text of innovation management and the diffusion of knowledge. decision-making processes to critical external stakeholders. This theory suggests that organizations vary in their intensity Their sustainability strategy was defined internally by key and direction of boundary-spanning activities. We apply the managers and presented to a friendly audience of consultants theory to the study of the influence of boundary-spanning and experts for feedback. The CEO endorses the process but activities on legitimacy strategies and their organizational does not publicly appear as a leader on sustainability topics. design requirements. We suggest that the supportive organi- zational capacities for boundary spanning also help corpora- When asked why their sustainability strategy does not feature tions to flexibly respond and adjust to legitimacy challenges more prominently in corporate communications, corporate in the most appropriate way and to cope with heterogeneous representatives refer to their “humble Swiss business culture.” environmental demands. They also point to corporate scandals from the past that still Dr. Dorothée Baumann- Prof. Dr. Andreas Georg haunt the organization. Internally, however, multiple platforms Pauly earned her doctoral Scherer is Professor of The literature differentiates between two types of boundary provide forums for interdepartmental exchange on how best degree at the University Business Administration spanning. Some boundary spanning activities serve to “buffer” to respond to heterogeneous stakeholder requests. of Zurich and is currently and Director of the Instit- from the external environment; other activities serve to “bridge.” working as a consultant ute of Organization and This means that some corporations monitor societal expecta- In our academic work, we further discuss the theoretical and and project manager for Administrative Science (IOU) tions to better shield the organization from societal expectations practical implications of these research findings. AccountAbility. at the University of Zurich.

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The Strength of Loose Couplings – The Global Compact as a Multi- stakeholder Initiative

By Prof. Dr. Andreas Rasche

Multistakeholder initiatives such as the UN Global Compact between participating organizations. In principle, participants organize their participants in specific ways. Most importantly, can be coupled tightly or loosely. Research shows that four they have to bridge global (universal) principles and local factors influence whether couplings between participants (contextualized) implementation practices. Some initiatives are tight or loose. have responded to this need by creating a nested network structure – that is, local networks that are embedded into a • Loose couplings exist if there is a low frequency of interaction tight couplings between participants that balances the need on how their environment functions (e.g., because they share wider global “network of networks.” The UN Global Compact, between participants. If participants interact on an irregular to adapt universal principles to local contexts and the need a common set of values). This enables a better coordination for instance, has more than 100 local networks, which are basis, and hence affect each other occasionally rather than to coordinate activities across local contexts. of actions and, hence, tighter couplings. Finally, interactions connected through regional hubs, the Annual Local Network constantly, a loose coupling is likely to be found. within local networks often produce more immediate results Forum, and interactions with the Global Compact Office. • Loose couplings can also be caused by indirect relationships This raises a critical question: How can tight and loose cou- (causing tighter couplings) because participating organizations Stakeholder dialogue and collective action are emerging both between participants. For instance, if two organizations do plings coexist within multistakeholder initiatives? While it is work on both design and implementation of the underlying within and among such networks. not communicate directly, but only via a third party, their plausible that either tight or loose couplings exist in a given activities. relationship becomes loosely, rather than tightly, coupled. system, their coexistence requires further explanation. The Addressing complex global development problems (e.g., access • Loose couplings occur when a high degree of causal inde- nested network structure of multistakeholder initiatives (see Reconciling flexibility and stability to water) requires systemic change. Such change can only oc- terminacy exists. High causal indeterminacy means that above) plays an important role in this context. This nested cur if initiatives like the UN Global Compact organize their participants disagree about how their environment functions network structure allows for the interplay of tight and loose The coexistence of tight couplings (within local networks) participants in ways that sufficient scale can be achieved. Scale or should function. As a consequence, the coordination of couplings. While tighter couplings prevail between partici- and loose couplings (among local networks) creates three depends not only on the willingness of individual participants activities becomes difficult, which, in turn, causes looser pants within local networks, looser couplings exist among important effects for initiatives like the UN Global Compact. to implement sustainable business practices, but also on a couplings. participants from different local networks. First, since local networks are only loosely coupled to other sound organizational framework enabling collective action • Loose couplings are also caused by the existence of non- networks, it is possible to seal off problems in single networks and connecting participants within and among local networks. immediate effects. Non-immediate effects create a lag be- We can illustrate this by discussing how the four factors that without creating negative spillover effects to other parts of Such a framework needs to reconcile two competing demands: tween a stimulus by one participant (e.g., an attempt to influence the strength of couplings impact the organization of the overall initiative. In other words, the coexistence of tight (1) the ability to locally adapt universal principles within lo- communicate) and the response by another participant. participants in multistakeholder initiatives. As local networks and loose couplings safeguards the stability of multistake- cal networks (i.e., flexibility) and (2) the ability to constantly engage participants in collective action and partnerships, the holder initiatives. The resulting stability is a precondition coordinate activities across local networks (i.e., stability). Many would see the existence of loose couplings as a problem, frequency of interaction among participants is relatively high for balancing the quantity of participants and the quality of mostly because it makes multistakeholder initiatives harder (causing tighter couplings). Local networks also allow differ- their engagement – a key priority of the UN Global Compact. Tight and loose couplings in multistakeholder initiatives to govern (at least when viewed from a distance). Research, ent stakeholder groups to interact directly (causing tighter Participant growth requires an organizational environment however, has shown that looser couplings strengthen the couplings), while interactions among different local networks that allows for local participant clusters to expand and con- To analyze how multistakeholder initiatives reconcile flexibil- ability of initiatives such as the UN Global Compact to create usually depend on advocates (causing looser couplings). Partici- nect their activities while, at the same time, retaining a high ity and stability, we have to look at the strength of couplings systemic change. In fact, it is the coexistence of loose and pants from a single local network are also more likely to agree degree of autonomy.

22 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 23 Agenda Stakeholder Management

Second, the interplay of tight and loose couplings allows for a more effective management of the link between global prin- ciples and local practices. Looser couplings among networks provide participants on the ground with implementation au- thority and enable them to adapt universal principles to local needs. Such localized adaptations help to stimulate systemic change, as global problems are translated into local solutions, Responsible Lobbying and solutions themselves can be connected across countries and regions. This creates participant ownership and allows for managing a global portfolio of issues in a localized way.

Finally, the coexistence of loose and tight couplings also impacts the way multistakeholder initiatives legitimize themselves in Lobbyists paying elected representatives to place questions in the UK parliament. local environments. Legitimacy is achieved when such initia- Arms manufacturers giving South African officials BMWs in exchange for armaments tives are framed as appropriate and desirable within a given contracts. Smoke-filled back rooms featuring stuffed brown envelopes. No wonder system of norms and values. Loose couplings provide local networks with the necessary autonomy to have decentralized lobbying has a bad name. But these are not images of lobbying: They depict corruption, stakeholder dialogues that help to explore what norms and albeit in a policymaking setting. These actions are morally suspect and usually illegal. values are relevant in “their” local context. Once local networks They also contravene the UN Global Compact: Principle 10 requires the combating of have understood what counts as appropriate behavior in their respective environment, they can develop activities that are corruption. In fact, lobbying is far more often about committee meetings, reports, and perceived as necessary and legitimate by relevant stakeholders other unspectacular activities. Lobbying can be understood as the focused provision (e.g., producing guidance on water sustainability in regions of relevant information, with the intention of influencing public policy or process. where this is a particular concern). Corporate lobbying is not just important for companies; it helps create better public The coexistence of looser and tighter couplings in initiatives policies, and can therefore have real societal value, despite its bad press. like the UN Global Compact is important for initiating collec- tive action in times of rising environmental complexity. On the one hand, loose couplings preserve diversity in responding to environmental stimuli (as more options can be potentially activated). On the other hand, tight couplings ensure that this diversity results in impactful collective action on the ground. By Dr. Stephanos Anastasiadis and Dr. Sigrun M. Wagner Despite conventional wisdom that tighter couplings create better and more durable governance arrangements (because outcomes are supposedly easier to control), the arguments presented here show that it is necessary to appreciate “the Even so, there is much scope for criticizing corporate lobby- Nearly a decade later, not much has changed. The world has strength of loose couplings.” ing. In our research, we have found that the lobbied (usually moved on in other ways, though. Recent scandals and crises civil servants and elected representatives) often perceive have shone a light on corporate actions. At the time of writ- companies to exaggerate, bully, and even lie outright. In their ing, the horsemeat scandal in Europe and a factory collapse 2005 report, Towards Responsible Lobbying, the UNGC and in Bangladesh were leading to a greater focus on supply AccountAbility argue that lobbying needs to be reformed, and chains. Corporate tax has become a hot topic. We have heard set out proposals for responsible lobbying practices. Simon repeated calls for government intervention. Before the crisis, Zadek, then AccountAbility CEO, rightly said: “Lobbying [was] governments had been in retreat. As Colin Crouch argued one of the few business practices to have escaped close scrutiny in 2011, this is a long-term trend. In the short-term, though, Dr. Andreas Rasche is Professor of in recent years.” David Vogel later wrote about responsible the significance of governmental policies and regulations has Business in Society at Copenhagen lobbying (in the HBR List 2008), arguing that companies become clearer. This has thrown lobbying into sharper relief: Business School and serves on the should lobby for more sustainable policies. The 2005 report Societal skepticism of lobbying has become more pronounced, GC LEAD Steering Committee. acknowledged that demands for complete transparency are as “dodgy” lobbying practices are seldom out of the news. At The ideas expressed in this text are both unrealistic and may in fact be counterproductive. It least one socially responsible investment label has recently adopted from: A. Rasche, (2012): acknowledged that more rules – such as compulsory reg- started taking lobbying into account in their company ratings. Global Policies and Local Practice: istration – do not prevent unethical lobbying. And it also Loose and Tight Couplings in Multi- called for UNGC participants – more than 2,200 companies Interestingly, the UNGC implicitly promotes responsible lob- Stakeholder Initiatives. - Business Ethics and NGOs at the time – to bring lobbying practices in line bying. Principle 6, for example, is about promoting elimina- Quarterly 22(4): 679-708. with the Ten Principles of the UNGC. tion of workplace discrimination. A company that takes its

24 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 25 Agenda Stakeholder Management

Lobbying needs to become a critical “component of a CSR strategy. and lobbying practices on the other. The only thing that This is not an engineering problem, and it cannot be solved seems to have changed in this respect is that the lobbying of simply by introducing codes of conduct or implementing individual companies is now more visible. The flow of media greater transparency.” The stories we tell ourselves to make reports on lobbying suggests that many companies have not sense of our environment have real-world consequences: They internalized the danger. directly affect not only what we see and feel, but also how we act. In short, if we want to have responsible lobbying, then In a seminal paper, Mark Suchman wrote about gaining, we need to change the story. Engaging with stakeholders and maintaining, and repairing legitimacy. There are three kinds, sharing good-practice examples is a positive way to start, as is he argued. Pragmatic legitimacy is based on the audience’s ensuring that company lobbyists are fully integrated into the (stakeholder’s) self-interest. Cognitive legitimacy rests on rest of the company. Real change will take time and require comprehensibility and taken-for grantedness. Finally, moral intensive engagement. This is hard, but the rewards for both legitimacy is based on normative approval. All legitimacy business and society could be substantial. management depends heavily on communication between the organization and its stakeholders. In essence, then, if a business wants to be sustainable, in the narrow sense of con- tinuing to survive, then it needs to remain legitimate, thus UNGC commitment seriously arguably has an obligation to companies see environmental protection as important, specific maintaining its social license to operate. This is at the heart promote public policies to this effect, particularly where it is regulations present costs and/or opportunities: The emphasis of stakeholder management. More recently, Guido Palazzo present in or entering a country with weak institutions and has been on regulations’ cost-effectiveness. Where companies and Andreas Scherer have argued that moral legitimacy is rule of law. It is also in companies’ interests to do so. Consider see environmental regulations only in terms of costs (which is increasingly important as other bases for legitimacy decline. the following caricature, based on Principle 4 (eliminating often), they tend to lobby defensively, that is, to block policy Their argument explains the ever-greater societal and media all forms of forced and compulsory labor): If you are going proposals. In a similar study, Stephanos Anastasiadis found pressure on companies to act responsibly. Indeed, the suc- beyond local regulations and paying your own staff decently, that the way companies understand the nature of the political cess of the Global Compact itself is hard to explain without but your competitor is using slave labor, then you are at a process – and their role within it – is critical for the nature a rise in the significance of moral legitimacy. It is therefore disadvantage, mutatis mutandis. If you accept the “fallacy of of their engagement. Most companies took an instrumental remarkable that corporate lobbying seldom appears to enjoy restricted alternatives” and race for the well-publicized bot- approach to lobbying – analogous to seeing policies only in normative approval. tom by employing your own slave labor, then your company cost terms. A minority took a cooperative approach. These will suffer reputational damage when (not if) your behavior are very different perspectives. For example, companies David Vogel wrote: “Lobbying needs to become a critical is reported in your home market. Instead, you can promote taking an instrumental approach tend to understand their component of a CSR strategy. It is not enough for companies stricter standards and monitoring – policies that create a own engagement in terms of acting to prevent government to engage in sophisticated private initiatives, however strate- level playing field at an acceptable level. If raising your rivals’ interference, which they see as unnecessary and intrusive. The gic. They must also be willing to support public policies that Dr. Stephanos Anastasiadis Dr. Sigrun M. Wagner is a costs gives you a competitive advantage in the process, then more cooperative companies, by contrast, tend to value the make it easier for them and other firms to do the right thing.” is a Lecturer in Sustainabil- Lecturer in International so much the better. legislative process as generating freedom to innovate within John Elkington has recently made a very similar argument. ity at Royal Holloway Uni- Business and Sustainability limits that apply to all. Both studies point to a sense that the We agree that this is needed. But it will not be enough for versity of London, where in the School of Manage- If it is this simple, then why does it not happen all the time? “simple facts” are less important for responsible lobbying than companies to simply decide to change. Mistrust of politics and he teaches business ethics ment at Royal Holloway, Indeed, why does lobbying have such a bad reputation at all? the manner in which companies make sense of what is going politicians is deeply rooted in the culture of many companies. and sustainability. He is University of London, And why are we not seeing improvements over time, in line on. This suggests that problems in lobbying will continue The practices resulting from that mistrust mean that policy- an independent advisor having gained her PhD at with CSR developments in other areas? until companies address the underlying phenomenon. This makers have come to expect companies to lobby unethically, to Forum Ethibel, which Loughborough University really matters, because in a world of social media, ubiquitous adjusting their expectations accordingly. So in addition to maintains socially respons- Business School on lobby- There is emerging evidence that the problem is at least partly internet access, and whistle-blowers, companies have more changing themselves, firms will need to work to change the ible investment labels, and ing of multinational enter- one of perception. In her recent study of corporate environ- to lose than ever. In 2005, the UNGC noted a significant gap expectations of their policymaking partners. If the root of the has previously worked as a prises in the automotive mental lobbying in Europe, Sigrun Wagner found that while between “everyday CSR” policies and activities on the one hand, problem is cultural, then the treatment must also be cultural. lobbyist. industry.

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Which Form of Dialogue Is Multistakeholder platform (exchange) Substantive function: Recommended when: Suitable for Which Purpose? • Visibility of platform to outside world • the possibility of permanent exchange with other • Stakeholders represent larger organizations stakeholders is sought on a specific theme; • in this context, recommendations and comments on • Frequently driven by political or economic current developments are to be made; A broad distinction can be made between stakeholder dialogues that are geared toward developments • joint implementation of projects is not aimed at for the consultation and those that focus more strongly on cooperation during implementation. time being. In consultative stakeholder dialogues, actors contribute their expertise, viewpoints, and experience. Initiators of the stakeholder dialogue are usually responsible for the further use of recommendations and lessons learned. Consultative and cooperative forms of stakeholder Stakeholder dialogues as cooperation arrangements dialogues subsume the following variants: Multistakeholder initiative

Substantive function: Recommended when: Stakeholder dialogues as consultations • Joint responsibility for: • a new approach, standard, or policy is to be jointly - implementation steering - change developed and implemented; • for this purpose, action is to be taken for a temporary One-off stakeholder consultation for Systematic, repeated stakeholder con- - monitoring and evaluation - results period by a specially established stakeholder group; - decision making the purpose of exchange sultation to integrate recommendations • the required personnel and organizational structures can • Usually has an agreed steering structure (steering and should be established; Substantive function: holder groups to plan a Substantive function: various stakeholder committee, executive committee) • responsibility for implementation is to be shared. project, perform research groups within an • Political input • Strategy development / for a study, etc.; established period with assessment • To obtain feedback regard to the planning of • the interests and aware- • Assessment of planning a project or research; Multistakeholder platform (implementation management) • Research / planning input ness of different actors • Obtaining regular • stakeholder input is to be • Exchange of experiences are to be raised for a feedback integrated into planning, Substantive function: Recommended when: specific theme; etc.; • Coordination and joint • specific tasks related to improved of recommendations; • stakeholders are to be implementation of tasks in the service delivery, for instance, are • cooperation is to be established in Recommended when: • no further, in-depth Recommended when: given an opportunity public interest to be tackled together in the long the long term between different cooperation is envisaged • Input or feedback is to be • contributions or feedback through repeated term, beyond the joint making stakeholders. at present beyond this obtained just once from are to be repeatedly consultation to assess consultation. a specific stakeholder obtained from a specific planning progress and group or various stake- stakeholder group or give new feedback. Stakeholder Partnership

Substantive function: Recommended when: Institutionalized stakeholder consultation • Joint • jointly determined project-related goals are to be - implementation planning achieved with shared responsibility; Substantive function: Recommended when: - performance of activities • a temporary cooperation arrangement between the stakeholders involved in conducting a project with • Institutionalized strategy / planning assessment • political projects, etc., are to be (further) developed and the - monitoring of results inputs of various stakeholders are to be regularly obtained established responsibilities is to be formalized; • Involvement of people concerned to judge consequences, - responsibility for success for this purpose within a firmly organized framework; • the personnel and organizational structures required to for instance - decision making • the implementation of plans for public-sector projects achieve this purpose are to be set up; • Representation of stakeholders according to established (possibly also for private projects) has consequences for • management structures are grouped in one location • joint monitoring and evaluation of results is envisaged. regulations public goods. Source: Stakeholder Dialogues Manual, published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) 2012

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Climate Change

Climate change is the biggest threat mankind has ever faced. It is caused by the build-up of greenhouse gases from burning fossil fuels and the destruction of carbon storage areas such as the rainforests, which in turn leads to global warming. Limiting global warming to 2 degrees Celsius, as called for by the UN Framework Convention on Climate Change, is crucial. A low-carbon economy is the key to significantly reduce the output of greenhouse gases. This chapter explains the steps necessary to move toward a decarbonized economy.

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due to the logistics sector’s dependency on fossil fuels, which gener- ate CO emissions when combusted. In 2012, Deutsche Post DHL’s Innovating 2 operations were responsible for 28 million tons of CO2, of which 80 percent were so-called Scope 3 emissions from subcontracted for a Better transportation. Working closely with our subcontractors to tackle global warming and climate change is therefore at the forefront of Future our efforts to bring about an environmentally responsible future. Our industry-leading GoGreen environmental protection program

focuses on innovative responses to minimizing CO2 emissions from the hundreds of transportation subcontractors around the world that we work with, as well as improving the carbon efficiency of our own operations. Five years ago, we became the first logistics company in the world to set a measureable climate protection target. By 2020,

the Group aims to improve the CO2 efficiency of its own operations, Our globalized world and its interconnected challenges re- together with those of its transportation subcontractors, by 30 per- quire businesses to think and act in new dimensions. We cent compared with the 2007 baseline. We are already halfway to must ask ourselves: Is our economic success enabling social meeting this target. progress? Are we considering the environmental impact of our operations? Are we making decisions in the long-term interests Tackling the causes of global warming requires a global, multistake- of our stakeholders? holder effort if we are to achieve lasting positive change. Individual companies can – and do – make a big contribution. But when Dr. Frank Appel, CEO, At Deutsche Post DHL, these considerations have shaped Strategy business, governments, NGOs, and academia work together, we can Deutsche Post DHL 2015 – our corporate roadmap to becoming an employer, provider, find innovative solutions much more quickly. This is how Bonn, for and investment of choice. We recognize that we will only reach these example, became the first city in Germany with a carbon-free vehicle aims by embracing the multifaceted role we play in society as one concept for mail and parcel delivery. of the world’s largest employers and the global leader in postal and logistics services. Deutsche Post DHL, with its customers, suppliers, and em- ployees, is committed to forging new pathways to a carbon- Connecting people and markets across the globe is a business that, efficient economy. As we innovate for a better future, both in its current form, has an environmental impact. This is primarily our business and society benefit.

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Pressure on infrastructure and natural resources is already The Clean Revolution is not just a vision of an ideal future. immense, and growing: Demand for water will increase by It is happening now, in cities, regions, states, and countries 40 percent from 2010 to 2030. Demand for energy will in- around the world as well in companies of all sizes. The Clean crease by 22.5 percent from 2010 to 2025. Demand for food Revolution is already creating millions of new jobs: In the will increase by 50 percent between 2010 and 2030. At the United States, a report by the Bureau of Labor Statistics found same time, if we are to preserve our natural resources and that there were about 3.4 million green energy jobs in 2011: an standards of living, greenhouse gas emissions must be reduced increase of 4.9 percent from the previous year. When compared by 80 percent by mid-century. This presents a challenge for with the data for alternative areas of the economy, this figure our government and business leaders; they must meet these is impressive; all other jobs increased by only 1.2 percent. This social and environmental challenges while ensuring economic is supported by 2012 data from The Solar Foundation, which stability as well as expanding prosperity. reported that California has more solar workers than actors;

The Case for a Clean Revolution

By Mark Kenber Cities are key contributors to climate change, as activities there more Texans work in solar than ranching; and the US solar are the main source of greenhouse gas emissions. If efforts to industry has more workers than the coal mining industry. address climate change are to be successful, they must integrate urban requirements and environmental management capacities. The outlook for the renewable energy sector looks bright – investment in clean-energy capacity is expected to triple be- tween now and 2030, according to analysts from Bloomberg By 2050, our planet will be home to 9 billion people. The New Energy Finance. Research by Google in 2011 found that world’s middle class will reach 4 billion; by 2020, 50 percent breakthroughs in clean-tech innovation could generate an extra $ 155 - 244 billion in GDP per year in the United States of China’s population will be middle class. The world has This is not an insurmountable task but it will take a new, from 2030 if the right investments are made now. also become increasingly urban: In 1800, only 2 percent of bold, daring vision for how we do business, heat our homes, the world’s population was urban. Today, half of the world’s build infrastructure, and structure our economies. This is the It is not only the United States that is reaping the benefits of vision of a low-carbon, high-opportunity Clean Revolution: the Clean Revolution – the Indian Prime Minister, Manmohan people are living in towns and cities, with 180,000 people a swift, massive scale-up of clean energy and infrastructure, Singh, has announced plans to double India’s renewable-energy added to the urban population each day. and of smart technologies and design. This will improve the capacity by 2017 and introduce clean-energy subsidies. South efficiency and use of our natural resources while creating jobs Korea’s business community invested $ 12.7 billion between and boosting economic growth. 2008 and 2010 as part of the nation’s green-growth program,

34 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 35 Agenda Climate Change

establishing Korean companies as major exporters of clean lease the panels or buy the produced power at a fixed rate. technology. Meanwhile, Scotland is building its economy SunRun alone has been installing $ 1 million worth in solar on the back of its extraordinary renewable-energy resources panels every day since January 2011. base, producing 35 percent of its electricity from wind and water resources already, and planning for 100 percent of its LED (light-emitting diodes) street lighting is another example electricity generation to come from renewable sources by 2020. of a low-carbon technology that can help state and municipal In the United Kingdom, the Office for Budget Responsibility governments to reduce carbon emissions, improve public infra- has predicted that the overall economy will grow by just 0.6 structure, and lower economic expenditures. At the Rio+20 UN percent in 2013, whereas the green economy is growing at a Global Compact Corporate Sustainability Forum in June 2012, much higher rate of 5 percent a year. The Climate Group published Lighting the Clean Revolution: The Rise of LED Street Lighting and What It Means for Cities, It is not just policymakers and businessmen and women who which presents the findings of an independent, two-and-a- have noticed the potential of the low-carbon economy. The half-year global pilot of LED lamps in 15 separate trials across demand for skilled clean-energy workers is increasing, and as 12 cities, including New York, London, Kolkata, and Sydney. a result, these specialized workers are being rewarded with The conclusion of the trials found that LED street lighting can higher-than-average salaries. In its 2011 US survey, The Brook- generate energy savings as high as 85 percent – a valuable ings Institute found the median wage in the clean economy to savings for public administrations in the current economic be 13 percent higher than in the national economy as a whole. environment. As a consequence of these high energy savings, As a result, the younger generation is realizing the employment 670 million tons of greenhouse gas emissions are saved every potential that the Clean Revolution offers them. In the United year. As well as the economic and environmental benefits, Kingdom, a recent survey of young people (age 19 - 25) found the report also analyzed the social benefits attributed to LED that 59 percent are interested in working in the green economy. street lighting. Surveys in Kolkata, London, Sydney, and To- vision a reality. Low-carbon technologies are being scaled-up an increase in sales of the Toyota Prius hybrids. It became the ronto indicated that citizens preferred LED lighting, with 68 A global Clean Revolution depends on bold leadership from in factories and cities to reduce emissions, improve living bestselling passenger vehicle in the state, selling 60,688 in percent to 90 percent of respondents endorsing the city-wide businesses, governments, and innovators. Leadership is crucial standards, and unlock economic potential. This leadership 2012: a remarkable 78 percent increase over 2011 sales. There rollout of the technology. As a result of the pilot’s findings, because, within most systems, approximately 80 percent of the is evident in the scale-up of electric vehicles (EVs), which are is a similar pattern with models from other EV manufactur- The Climate Group and Philips, the report’s co-author, are effects can be attributed to 20 percent of the causes. We believe at the tipping point of becoming mainstream in both com- ers – there was a phenomenal 286 percent increase in sales calling for a new international low-carbon lighting standard this principle holds equally for sources of global emissions mercial and consumer markets. A 2012 market analysis from of Nissan’s Leaf EV car in the United States in March 2012 that will see all new public lighting – both street lighting and emission-reduction solutions: 80 percent of emissions are the global management consultancy McKinsey & Company when compared to the same period the year prior. and public building lighting – use LED as of 2015, with the caused by 20 percent of the global population. But 20 percent reasoned that EVs would become cost-competitive with con- aim of all public lighting being LED by 2020. of global leaders can deliver 80 percent of the solution. ventional vehicles as the price of a lithium-ion battery pack In many countries, the global $100 billion solar-photovoltaic falls from its current level of $ 500 - $ 600 per kilowatt hour (PV) sector has reached a tipping point and, as a result of It is clear that we are making progress with the scale-up of The Climate Group acts as a catalyst for creating this global (kWh) to $ 200 per kWh. McKinsey & Company believes that government subsidies and corporate investment, PVs are established clean technologies and emerging clean-tech in- coalition of low-carbon leaders: At Climate Week NYC 2012, the decline in battery prices could occur as early as 2020 as becoming competitive with fossil fuels. Many countries, novations. But the scale-up of these technologies must be an eclectic and surprising mix of global leaders and innovators a result of manufacturing at scale, lower component prices, including Germany, Denmark, Italy, Spain, and parts of accelerated and it must happen now. The Clean Revolution joined our call for an American Clean Revolution. Former UK and advances in battery technology. Australia, which have higher electricity prices, have already offers us the opportunity to change the economic and social Prime Minster Rt. Hon. Tony Blair said: “Combating climate reached grid parity – Japan, France, Brazil, and Turkey are future of our societies. We cannot, and must not, allow our- change is massively in our best interest if we want higher Early adopters of commercial EVs are investing now in order expected to reach parity by 2015, and the MENA region is selves to miss this crucial tipping point in our development. energy supply security, lower costs, and a better life. As global to reap the benefits of the technology. In November 2010, GE close to grid parity. In the United States, solar PV technol- The Clean Revolution is a positive, inspiring, and achievable citizens we are going to continue to be agitating for a solution committed to purchasing 25,000 electric vehicles to jumpstart ogy is expected to reach grid parity for some PV projects in vision of tomorrow that answers the economic and political to this problem which is absolutely critical to the future of the electric vehicle market in the United States while the 2014. Most regions will reach grid parity by 2017 and China imperatives of today. It is indeed the only feasible path to a human progress.” Also speaking at Climate Week NYC, Evan Department of Defense (DOD) announced that it is planning could reach solar power grid parity in most of its regions as smarter, better, more prosperous future. For all. Williams, co-founder of Twitter, acknowledged the crucial to invest $20 million to incorporate up to 500 vehicles-to-grid- early as 2015 - 2016. role that innovative technologies will play in the low-carbon capable electric trucks, buses, and related infrastructure into its economy: “America’s long history of prosperity was built by non-tactical fleet in 2013. The DOD estimates that the money In just six years, installed solar-PV capacity across the globe entrepreneurial innovators in science and technology. These saved through such a system will cover the upfront investment has increased 1,200 percent, from 5.4 gigawatts (GW) in 2005 visionaries imagined and then created a new and better way in 10 years, while providing valuable insights into the value to more than 65 GW in 2011. In Australia alone, there are of doing things, which was the catalyst for a century of pros- of the vehicles’ energy-storage potential. If the project goes as 1 million households with solar PV systems now installed – in perity. We need powerful new thinking in that same vein in planned, the next step will be to expand to as many as 1,500 2008 there were just 20,000. With current growth rates, solar order to challenge and transcend the limits of our high-carbon vehicles at 30 installations nationwide. energy could be providing 10 percent of the total global power economy with clean energy innovation.” generation by the end of the decade. In the United States, Increasing numbers of consumers are turning to EVs for as- SolarCity, SunRun, and Sungevity have made solar panels af- There are leaders around the world who have envisioned a sistance with household savings. In 2011, the US gas price in fordable for California’s residents with their unique business Mark Kenber is CEO of Clean Revolution future and are acting decisively to make their California reached a record high $ 4.67 per gallon, catalyzing model – they let customers install solar facilities and either The Climate Group.

36 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 37 Agenda Climate Change

THE CARBON ATLAS World 32,042 bn

tonnes of CO2

Ukraine Canada Poland 272 514 299 Russia Germany 1,574 Netherlands Kazakhstan 170 734 226 Europe & Belgium Uzbekistan 104 117 United Czech Central Asia Kingdom Republic Japan United States 475 108 France 6,428 bn 1,101 363 Italy tonnes of CO2 5,300 401 Spain Turkey 288 278 China South Korea 509

Iraq North America 109 Middle East & Iran 7,687 5,814 bn North Africa tonnes of CO2 602 Mexico 2,196 bn

446 tonnes of CO2 Saudi Arabia Pakistan 161 India 433 United Arab Emirates Thailand Egypt 157 272 216 Vietnam Venezuela Algeria 1,979 Malaysia 142 121 198 185 Indonesia East Asia Latin America Brazil 452 & Pacific & Caribbean 367 South Asia 11,304 bn 1,624 bn tonnes of CO2 Argentina 2,215 bn tonnes of CO Sub-Saharan 2 175 tonnes of CO Africa South Africa 2 499 729 bn

tonnes of CO2 Australia 400 Source: Worldbank, Data status 2009

38 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 39 Agenda Climate Change

change potentially could incur great costs. Crop yields would Confronted with risk, and the need to fundamentally change be put at risk by changing precipitation patterns and sea levels the way we do business, denial is a popular reaction. However, would rise slowly but inevitably. In combination with increas- to be a corporate citizen also implies the necessity to con- ing extreme weather events, this threatens global hubs over tribute to the public debate on climate change. That debate the long term such as New York, Shanghai, and Mumbai, to knows four stages of denial: (1) There is no climate change; name just three examples. (2) it exists, but it is not man-made; (3) it might be caused by our greenhouse gas emissions, but the impacts are not dan- Yet there is also that other consideration, one that neither gerous; (4) the impacts might be dangerous, but we cannot I as a scientist nor any business leader can neglect, because do anything about them because it is too late, too difficult, we are citizens of this one world after all. We feel we have a or because states and companies will not act. On a different responsibility to act for those who lack the means to do this – level, procrastinating and pretending that the matter is not namely, our distant neighbors living in developing countries really urgent can be a form of denial as well. It is that fourth and our children’s children who have yet to be born. stage of denial that is the most perfidious. Positions

It is a tragedy of historic dimensions that climate change impacts Unfortunately, the same could be said about attempts to are likely to be most severe in those countries – and for those hide the issue of climate change behind a cloud of further populations – that contributed least to global greenhouse considerations regarding the sustainability issue. Broadening gas emissions. Most developing countries are situated in the an issue can be a way of avoiding the challenge of actually regions where, for example, the monsoon regime might show tackling it. Climate change is a crucial factor, in many cases a significantly increased variability, where storm surges might triggering other elements of a sustainability vision. Cutting

intensify, and where rising sea levels – which are not distrib- CO2 is a prerequisite for achieving progress with other sustain- uted equally across the globe – will be the greatest. Moreover, ability issues. Therefore, corporate responsibility in the age it is in these countries that many farmers cannot afford even of climate change is not about putting recycled paper in the The world for just one season of crops to fail, as they have no reserves to printer, or sponsoring some game reserve in Kenya. These fall back on. And many governments in these countries do not might be good things to do, but what companies really need have the resources for adaptation measures such as building to do is to consider transforming their core business, as this is awaiting dams. It is this combination of factors that, as the World Bank’s has the biggest impact on their greenhouse gas emissions. President, Jim Yong Kim, put it, “should shock us into action.” For those who dare to do this, promising paths lie ahead. The innovation Now climate change poses a triple problem of distance. First, world is awaiting innovation that will change our industrial of temporal distance: Most impacts of global warming will start metabolism. In order to develop smart power grids and new

to really be felt in the second half of this century, not now. But technologies for energy storage, remove CO2 from the atmos- it is right now that one has to act if those future effects are to phere through intelligent use of biomass, use urban mining to be avoided. The second problem of distance is geographical. recycle materials, find more efficient ways to achieve seawater Anthropogenic greenhouse gas emissions are breaking new records every year. At present, Pakistan, which is vulnerable to climate change for many desalination, and design new ways of urban planning and build- we are on a track that will lead us to global warming of 4 degrees Celsius by the end of the reasons, is a distant place to care about. But as globalization ing, nothing less than a third industrial revolution is needed. century. The consequences are fatal, and it is mainly the poor of this world who will have makes our world smaller, climate change impacts that disturb the economic and political stability of Pakistan – which is a Again, this is certainly about green growth, but it is also about to pay for it. Professor Dr. Hans Joachim Schellnhuber, member of the IPCC and Director neighbor of Afghanistan and India – quite obviously could responsibility toward society as a whole. The choice about of the Potsdam Institute for Climate Impact Research (PIK), warns: “If the world is to avoid affect our livelihoods as well. whether to be a laggard or a pioneer in this approaching in- dangerous climate change, the discussion in Rio needs to go beyond the very broad topic of dustrial revolution might be the most important part of that The third problem of distance could be called a cognitive one. thing we call corporate responsibility. sustainability and the very narrow concept of ‘green growth.’ ” The following is an exposition Though the basic facts – such as that CO2 emissions lead of his standpoint. to global warming – are clear, admittedly the findings of cutting-edge climate science often are difficult for non-experts to access and comprehend. The analyses deal with nonlinear processes in complex systems. They are often based on intricate By Prof. Dr. Hans Joachim Schellnhuber computer simulations and come with uncertainties about, for Prof. Dr. Dr. h.c. Hans Joachim example, the exact magnitude of climate impacts and their Schellnhuber has been Director of the distribution in space and time. But this can be boiled down Potsdam Institute for Climate Impact to a risk-management approach. Risk is defined as probability Research (PIK) since he founded the The Great Transformation toward a post-fossil fuel economy is This does not contradict at all the fact that cutting our green- multiplied by the potential damage. So even if the probability institute in 1992. Furthermore, he is certainly a business opportunity – but it is much more than house gas emissions would be a downright rational choice that is small, the potentially huge damage that climate change Chair of the German Advisory Council that: It is a matter of ethics. is based on sound science, as it is clear that unabated climate implies makes it a very significant risk. on Global Change (WBGU).

40 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 41 Agenda Climate Change

What Business Has to Gain from Engaging in International Positions

Climate Policy By Julie-Anne Richards

Society, including business, works best when we jointly accept a challenge. One only needs to think of the huge strides that governments and businesses – supported by the public – made once nations had set themselves the task of landing a man on the moon. At the beginning of the “space race,” it was not even clear that this technological challenge could be met. Preventing catastrophic climate change will require a similar approach. Only when every facet of society – including government and business – sets the collective goal of ensuring our children inherit a safe planet will there be nothing to stop us.

What could trigger such a drive? Climate impacts are already supported by strong climate policies are the ones that have affecting just about every country on the planet, and the costs already benefitted from the new green economy. Since 2004, of dealing with the havoc they create are rising. For example, investments in Germany’s clean energy sector have grown the United States spent $ 136 billion in two years on natural by 122 percent, creating an industry that supports more disaster relief – a spike resulting from weather impacted by than 380,000 jobs. By driving down the price of electricity, climate change – yet action continues to fall far behind what wind and solar have made Germany an attractive location is needed. To deliver a safe climate, we need to keep warming for energy-intensive industries – cementing their position below 1.5 degrees Celsius and global emissions must peak by as a manufacturing powerhouse. Through policies to support 2015 and decline every year after that until they fall 80 percent the solar industry, China has created the world’s largest solar below that level by 2050. While pockets of extremely enthusi- industry in less than a decade. A recent adjustment of these astic climate activists are pushing for society to embrace this policies to support feed-in tariffs will see China’s solar industry goal and youth are struggling to have their concerns about their consolidate and continue to grow. European states that are future on this planet heard, business leaders – whose voices otherwise in the midst of an economic crisis, like Spain and are influential – remain largely silent. Businesses signing up Italy, have built solid renewable industries that are employ- to such a goal – individually and collectively through the UN ing people. These new, green industries are likely to be the Global Compact – and that are encouraging governments to best route out of the Mediterranean’s economic malaise. By do the same will make a huge difference in the momentum championing the implementation of the policies required to toward a safe climate. make these changes happen, businesses play a key role, such as supporting strong emissions-reduction and renewable- Establishing strong domestic emission-reduction targets and energy targets as well as mechanisms that price carbon fairly. putting in place policies to meet global goals are the best ways to drive the innovation we require to achieve this goal. Businesses thrive on certainty, and an international agreement The countries that have driven action with targets that are can help provide this certainty. An international agreement

42 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 43 Agenda Climate Change

Progressive corporations must speak loudly and call for “climate action.”

on aviation emissions through the International Civil Aviation undertake much more adaptation and mitigation than they meet this need, businesses can participate in internationally that recognize the shared responsibility we all have must Organization (ICAO) is within reach this year, but it will require can afford – much, much more. For example, the World coordinated research and development on climate technolo- speak loudly and call for climate action – internationally, progressive businesses to support it. Without an adequate ICAO Bank estimates that over the next 20 years, reducing emis- gies. They can support regulation to back up technological nationally, and locally. agreement, the EU’s Emissions Trading Scheme (ETS) will be sions in developing countries could cost $ 240 - $ 600 billion solutions, such as feed-in tariffs for renewable-energy power weakened – and woe to the businesses that continue their a year, while adapting to climate impacts could cost $ 10 - $ 90 projects. Encouraging the sharing of technologies, which Climate change is a challenge that far exceeds any sector’s negative campaigns against aviation in the EU ETS. Studies have billion a year. Furthermore, the International Energy Agency can put developing countries on a low-carbon development ability to deal with it on its own. UN agencies, governments, shown Europe’s frequent flyers are educated and concerned calculates that an additional $ 430 billion – or 0.5 percent of pathway, is an effective, relatively low-cost means toward our businesses, and civil society all have a role to play in ensur- about climate change. It would not take much for this group global GDP – will need to be spent on energy infrastructure long-term climate goal. ing a low-carbon, sustainable, equitable future. We all have to switch allegiances from a dinosaur airline acting against annually by 2020. Clearly, there are opportunities for businesses a responsibility to help our leaders make the right choices to effective regulation to reduce emissions to an airline that is in these markets. But first, governments need to deliver the A report released last year by the International Energy Agency deliver this future. This is much more important than putting helping to build a green, low-carbon future. $100 billion in public money they promised in Copenhagen. warned that we need to keep two-thirds of our remaining fos- someone on the moon – this is delivering an inhabitable Once the public funds are delivered, the amounts of private sil fuel reserves in ground if we are to keep climate change planet for our children. Other ways to provide certainty to businesses are through finance that will be necessary in developing countries can be within acceptable levels. But the Unburnable Carbon report market standards. The United Nations Framework Convention leveraged. To unlock these opportunities, businesses should from Carbon Tracker found that many businesses are wasting on Climate Change (UNFCCC) could roll out environmentally advocate – at the UNFCCC, the G20, and at home – for gov- capital by continuing to search for and exploit fossil fuels that rigorous standards for market mechanisms across the world. ernments to deliver on this promise. Furthermore, businesses will never be able to be used – generating what many have The UNFCCC could monitor, manage, and approve which should work collaboratively with NGOs and governments to described as a carbon bubble that will soon burst. To avoid instruments could be used in a compliance market in order ensure that both public and private funds are deployed ef- this and to retain social license, businesses can wise up to the to ensure the system maintains environmental integrity. fectively – for the climate and for poor people. fact that the future will necessarily be fossil fuel-free. They Businesses should encourage governments to be proactive can stop new fossil fuel exploration, and call for regulation here. After all, corporate social responsibility is much easier Another area in which positive action could open new mar- to keep fossil fuels in the ground (ensuring a level playing with effective standard-setting by governments in place. No kets in developing countries is the international negotiations field). Banks, financial institutions, and others with large one wants to be caught with meaningless credits, especially surrounding intellectual property rights (IPR). Even though stock holdings can divest from companies that persist with when factoring in the damage that can be done to corporate least-developed countries are not expected to have to con- inflating the carbon bubble. reputations from such a situation. form with the World Trade Organization’s regime on IPR (Agreement on Trade Related Aspects of Intellectual Property Perhaps most important is standing up to – and going public Julie-Anne Richards is No one knows better than businesses that money makes the Rights – TRIPS), many developing countries with slightly against – the businesses that are actively working against International Policy Coordinator world go around. International climate negotiations are no higher income levels could be priced out of the climate effective action on climate change. Progressive corporations at the Climate Action Network different. It is clear that developing countries will need to technology market, especially for adaptation technologies. To that see the opportunities that climate action affords and International.

44 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 45 Agenda Climate Change

So why are we not doing it? In my view, there are two The problem is that each entrepreneur expects their competi- Join Our Clean Generation main reasons: tors to take the first step because there is a certain risk in being the first to pioneer and invest in renewable energy. Critical 1. Too many people confuse the notions of price and cost. mass has not yet been attained and we do not know exactly We are told that renewable energy is more expensive than which technologies are going to be the most immediately Movement ! fossil energy. This is a misunderstanding ripe with conse- profitable or the breakthroughs of tomorrow. And so, they quence. All of the costs of renewable energy are included in wait. On the other side, the governments say that it is up to the price. The price of petrol, gas, or coal does not include the private entrepreneurs to take the first step. And so noth- International conferences on the climate depress me. Heads of state all come to say exactly the entire cost: You do not pay for the 200 million years that ing – or very little – happens. the same thing: “Climate change is a huge problem. It is going to be very expensive to resolve are necessary to replenish stocks, you do not pay for the oil slicks, you do not pay for the wars that have already begun Today, people are forbidden from throwing garbage into the and we can’t find the money.” How is it possible to motivate people when speaking only of and that will be extended in order to procure oil, and you forest, but it is still permitted to waste energy and to spew are not yet paying for the environmental cost of the CO CO into the atmosphere. We are lacking the political will and Positions problems and costs? 2 2 produced by fossil fuels. the legal framework that would oblige our society, industries,

We are comparing things that cannot be compared. Evidently, and consumers to use technologies that would allow us to By Dr. Bertrand Piccard the price of petrol is always less expensive than that of solar decrease our consumption of fossil fuels. Government ac- energy, but the cost of petrol is much more expensive than tion is what we have to encourage from now on if we want the equivalent cost of renewable energy. to energize industry, create jobs, and improve our purchase power and trade balance – while at the same time protecting As a doctor, I always learned that a problem is called a symp- and night without any fuel, you can also use. This is not the 2. The second reason is that the sacrosanct laws of the market our environment. tom, that a symptom has a cause, and that the cause has a secret technology of tomorrow but the technology of yesterday, no longer work in a speculative and globalized world. In the treatment. When we speak of climate change, when we speak the same solar panels, batteries, electrical motors, insulation past, you would have been able to expect from the market a

of CO2, we are not looking at the source of the problem: We foam, LED lighting system, construction techniques, and progressive equalization of the prices of energy derived from are only looking at a symptom that has a very clear cause. software. You can use them yourself. When governments different sources, and thus obtain a spontaneous transition. This cause is our dependence on fossil energy. It is a fact that state that they still cannot reduce the consumption of fossil Today this is no longer possible – our world does not work we use far too much non-renewable energy, which is expen- fuels before investing in more research and innovation, it is like that anymore. Our world functions on acceleration, on sive and pollutes our world. Yet there is a treatment called completely false. The technologies already exist. crisis, on speculation. The subprime mortgage crisis is a typical CleanTech. This allows us to decrease our consumption of example of a market law that spiraled out of control. energy and produce renewable energy, all the while creating If all of the existing technology – all the CleanTech – was Dr. Bertrand Piccard, along with jobs, making profit, and sustaining growth. used in our society, we would already be able to halve our The grand paradox is that we cannot simply take a political Brian Jones, was the first to complete total energy consumption and produce half of the rest from position from the left or right and apply it. In each doctrine a non-stop balloon flight around the What we are doing with the Solar Impulse program is giving renewable sources. It would leave 25 percent of the supply there are elements absolutely necessary to arrive at an effica- globe. His new futuristic enterprise is to a concrete demonstration of the efficiency of these technolo- coming from fossil energy, which would be acceptable for cious result. To resolve the current challenges, we need both fly round the world in a solar-powered gies. Everything we are using in our plane in order to fly day the environment. entrepreneurs and governments. airplane named Solar Impulse.

46 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 47 Agenda Climate Change

Upcoming

In an effort to encourage greater climate action, Caring for Portrait: Climate has convened large companies and small and medium- Caring for Climate Business sized enterprises (SMEs) to uphold five key commitments, the essence of which are as follows: Forum at COP 19 / CMP 9 in Warsaw

Caring For Climate 1| Reduce emissions, set targets, and report annual perfor- mance. For the first time this year, the UN Global Compact, UNEP and UNFCCC are organizing the Caring for Climate Business Forum: As part of his five-year action agenda, UN Secretary-General 2| Devise a business strategy to approach climate risks and Innovation, Ambition, Collaboration during COP 19 / CMP 9 on opportunities. 19 - 20 November in Warsaw, Poland. At the Forum, business Ban Ki-moon has prioritized sustainable development – and investors will have the opportunity to directly interface with with climate change as one of the key impulses. The United 3| Engage with policymakers to encourage scaled-up climate government negotiators, the UN and civil society. With a view to Nations has long been intensively engaged in various action. facilitating dialogue, action and collaboration, the Forum seeks to serve as a flagship channel for business to make genuine dialogues and targeted climate initiatives, and Caring for 4| Work collaboratively with other enterprises to tackle climate contributions to climate change negotiations annually. Climate is one such platform. change. In particular, signatories are welcome to contribute to the fol- lowing new opportunities and workstreams: 5| Become a climate-friendly business champion with stake- holders. • National Adaptation Dialogues: Global Compact Local Network-led dialogues for companies and local policymakers To determine whether these commitments have been met, to enhance adaptation efforts on-the-ground, including Caring for Climate conducted research and analysis of activity throughout the supply chain and communities. Launched by the Secretary-General in 2007, Caring for Climate by signatories using publicly available climate change related • Responsible Corporate Engagement on Climate Policy: aims to advance the role of business in addressing climate information reported by signatories through the Carbon Guidance on the nature and implications of corporate change. Led by the UN Global Compact, the UN Environment Disclosure Project (CDP) and in their Communications on interaction within climate policy, including an engagement Europe Asia Programme (UNEP) and the UN Framework Convention on Progress for Climate (COP-Climate). These are some findings, framework to help business play a positive and reinforcing 188.53 % 84.24 % Climate Change (UNFCCC), Caring for Climate provides a as presented in the Caring for Climate Progress Report 2012: role in achieving robust climate change policy. framework for business leaders to advance practical solu- Americas Africa Middle East Oceania tions and help shape public policy as well as public attitudes. Regional and Sectoral Participation • Climate and Energy Action Hub: A web-based portal that 54.15 % 17.5 % 8.2 % 2.1 % Chief executive officers who support the leadership statement enables various stakeholders to collectively accelerate are prepared to set goals, develop and expand strategies Signatories of Caring for Climate are primarily located in progress on climate and energy. and practices, and to publicly disclose emissions. Caring for Europe and Asia although there is a notable presence in the Figure 1 : Regional Breakdown by Number and Climate is endorsed by nearly 350 companies from 60 coun- Americas as well. As seen in Figure 1, European signatories Percentage of Caring for Climate Signatories. tries. made up 53 percent of total membership in 2011. Source: UN Global Compact website Multiple industries are well represented amongst Caring for 1 and 2 emissions into the atmosphere. Total scope 1 and 2 Climate signatories. However, the technology and industrial emissions of the Large Companies included in the sample

80 40 sectors are the most frequent signatories with 18 percent and rose by 3.8 percent between 2009 and 2010 likely due in 70 35 20 percent of total membership, respectively, as indicated in part to the global economic recovery. Despite the increase in 60 Figure 2. emissions for the entire Caring for Climate sample, approxi- 30 50 mately 42 percent of sampled signatories reported absolute 25 40 Emissions Analysis reductions over the reporting period as detailed in Figure 3. 30 20 The top 25 performers from the sample reportedly achieved 20 15 In defining a sample population of signatories for an emissions approximately 16.8 MtCO2e in GHG reductions during the 10 N umber of Signatories N umber of Signatories 10 trend analysis, Caring for Climate took into account large 2010 reporting year. It should be noted that five companies 0 5 companies that reported both high quality carbon and revenue within this “best in class” group achieved roughly 93 percent One retail Media data for the reporting years 2009 and 2010. After reviewing of the calculated reductions. Within the top 25 signatories, / Two 0 Industrials Technology Health Care Three corporate disclosures to CDP and COP-Climate submissions this population achieved between 2 percent and upwards of Greater Between Between No Change Between Between Greater / Infrastructure Transportation Consumer Four than 10 % 6 and 10 % 1 and 5 % between 1 and 5 % 6 and 10 % than 10 % Financial Services as well as other publicly available sustainability reports and 18 percent declines in emissions year over year due to specific Food and Beverage Five decrease decrease decrease years increase increase increase Energy other relevant material, a sample population of 153 large emission reduction initiatives. Figure 2 : Sector Breakdown of Caring for Climate Figure 3 : Absolute Emission Changes for Signatory companies was selected to assess the emissions performance Signatories. Sample between 2009 and 2010. of the initiative as a whole. During the reporting year 2010, Source: UN Global Compact website Sources: UN Global Compact website, CDP data, and other publicly available information the sampled signatories released approximately 2,017 million Source: Caring for Climate Progress Report 2012, C4C Update Letter

metric tonnes carbon dioxide equivalent (MtCO2e) of scope May 2013, compilation: Dr. Elmer Lenzen

48 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 49 Agenda CSR in Africa Inside ...

AFRICA

corporate social responsibility in AfriCa

50 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 51 Inside ... Agenda CSR in Africa

aFrica though, has been Africa’s natural wealth, including both non- Africa tend to be heavily centralized, with the state usually renewable resources such as oil, gas, and minerals, as well claiming ownership over lands that are not directly farmed or as renewable ones, which include agricultural land, forests, settled, which includes most forests and rangelands. The result wildlife, water, and fisheries. of this situation is that the majority of people living in rural areas – perhaps up to 500 million Africans in total – have The way that natural resources are managed and governed will insecure or inadequate recognition of their customary rights have enormous implications for the future of African societies. over their land and territories. This particularly impacts forest- For extractive resources such as fossil fuels and minerals, the dependent communities and pastoralists – groups of people challenge is to establish transparent and equitable governance who are heavily reliant on collectively held and managed systems to avoid the “resource curse,” whereby these indus- pastureland and forests, which tend to cover extensive areas. tries fuel corruption and thereby undermine governance and For example, in Africa less than 1 percent of all forests are development. An additional challenge is to balance extractive formally owned or controlled by local communities, compared industries with rigorous environmental and social standards to about 25 percent of forests in Latin America. and safeguards, in order to avoid the large-scale negative externalities seen in areas such as the Niger Delta. These legally unrecognized community lands – which some estimates place at roughly 1.6 billion hectares in total across For renewable resources, the foremost need is for establishing sub-Saharan Africa, or around 70 percent of the total land institutional frameworks that promote sustainability in use and area – also contain much of the region’s natural wealth, exploitation, for example by clearly allocating and enforcing in terms of forests, watersheds, rangelands, and wildlife. In property rights over land, forests, wildlife, and other valuable Kenya, for example, about 70 percent of all large mammals resources. These issues of natural resource governance lie at are found outside of state lands such as national parks, mostly the center of the struggle for sustainable development in Africa on communally managed rangelands where wildlife lives today; future investments may either contribute to balanced alongside resident pastoralist communities. These wildlife and more equitable growth, or they may alternatively lead to resources support a tourism industry that accounts for more disenfranchisement and resentment, and eventually to the than $1 billion in annual revenue and roughly 13 percent of all-too-familiar path of resource-linked violence. As global GDP in direct and indirect contributions. The reality is similar markets and the demand for African resources continue to in Namibia, Tanzania, Botswana, Zambia, and many other expand, the decisions made today about policy reform and countries where wildlife is a major source of tourism invest- development models will have an enormous impact in shap- ment and one of the most valuable resources in rural areas. ing these future outcomes in fundamental ways. The widespread failure of African governments to legally Africa and the global land and resource rush recognize rural citizens’ customary lands and resources is highly problematic – and dangerous – on a number of Africa’s Natural Assets: The past decade has witnessed a new global rush for land and fundamental levels. Secure rights over the land that one lives natural resources due to a range of economic and social factors. on and depends on for one’s livelihood is an essential human Global food prices have more than doubled since 2000, lead- The Struggle for ing to a major shift in demand for agricultural land, as both sovereign nations and major commercial producers seek to acquire large areas of fertile or irrigable land. New industries Sustainability such as biofuels are further contributing to a surge in land acquisition. Tourism, forestry, and carbon markets generate further demand for rural lands and resources across much of the developing world. In 2009, the World Bank estimated that more than 50 million hectares of agricultural land was being sought that year for acquisition and investment around the By Fred Nelson world, compared to an average annual acquisition of around 4 million hectares prior to 2008.

Africa has been the focal area for this land and resource rush During the past decade, African countries have experienced This growth has been driven by a range of factors, including for several basic reasons. First, African nations such as Sudan, a widespread economic boom, six of the world’s ten fastest- a reduction in regional conflicts, greater political stability Mozambique, and Ethiopia have large areas of land that are growing countries have been African, and in eight of the past and democratization, and new technologies such as mobile not actively cultivated, and thus appear to be “unused” and ten years, Africa has grown faster than East Asia. The rate of communications, which have transformative implications available for external allocation and conversion. Secondly, foreign investment has soared to almost tenfold in this period. for rural African societies. Perhaps the most important driver, formal legal rights over land, water, and natural resources in

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right, and the basis for a stable and growing economy. Insecure Risks and challenges investments are situated on lands that are being allocated by property rights undermine livelihoods, investment, and foster government authorities without the free, prior, and informed conflict and violence. The roots of this failure to recognize lo- The current global land rush thus brings into stark relief a consent or authorization of the local communities, who hold cal land rights and to maintain overly centralized tenure over number of fundamental contradictions and sources of conflict customary rights (rights that are in many instances recognized forests, wildlife, and other natural resources is an artifact of that characterize natural resource governance in Africa today. under international, but not national, law) over those lands. colonial and post-colonial history. The colonial state claimed Even as Africa’s natural assets increase in value and generate Governments are in essence granting lands to investors that ownership over land and resources as a central element of higher levels of interest and investment, both domestically they do not in fact hold free and unencumbered property rights imposing political and economic control over African societies. and globally, these market trends may create further incen- to. The result is that, in many cases, investors encounter major Post-independence African states maintained this order in the tives for national elites to resist granting local groups more conflicts when they acquire such lands. As recent findings interest of centralized, often socialist nation-building creeds, control over these resources, or to recognize local customary published by the Rights and Resources Initiative demonstrate, or in many instances to simply ease governing elites’ access property rights. At the same time, though, if greater rights to such conflicts are often costly, and often incur large losses on and control over the most valuable resources in a country. land and resources are not granted to local people, the stage the part of the investor, particularly if projects must eventually State control over land and natural resources has been a core will be set for increased conflicts over these resources in the be abandoned due to local legal action or resistance. aspect of modern Africa’s political economy, whereby govern- future. When governments grant land to investors that in fact ance has largely revolved around the competition between – if not in law – is used by and belongs to local communities, Reforms for sustainable growth various elite factions for exploitation and capture of public conflict is inevitable. assets. Often land has been among the most valuable of those African societies face both major risks and growing opportuni- assets, with state-linked elites often privately amassing land Sometimes these conflicts around land and resources play ties as global markets generate more demand for African re- or, more recently, natural resource concessions. a major role in the fate of entire nations; the long series sources – ranging from wildlife and wilderness for recreational of conflicts in Sudan and ultimate independence of South tourism, to minerals and fossil fuels for industrial consumption. These political-economic dynamics and constellations of inter- Sudan largely revolved around control over land and natural In order to minimize negative fallout such as growing social ests have strongly worked against the interests of rural devel- resources. More recently, the 2009 uprising and coup that led strife, economic inequality, and political instability, and to opment, natural resource conservation, and democratization to regime change in Madagascar was at least influenced by maximize positive opportunities for growth and investment, in Africa for the past 30 years. Rural citizens have long been the previous government’s decision to grant up to half of the two major priorities require more attention and action. deprived rights over the natural resources that their livelihoods country’s remaining arable land to a South Korean company. depend on. This excludes them from opportunities to partner Even where such large-scale violence and political instability The first is to design and implement far-reaching land tenure by the state, to where private enterprises and local communi- with external investors and to benefit from the development is avoided, struggles over land rights are increasingly taking reforms that grant clear recognition to citizens’ customary ties or smallholders directly enter into partnerships or joint of new value chains and enterprise opportunities. By depriv- center stage in African politics. In Kenya, for example, land lands, including both individual and group landholdings, as ventures. Such models are, in fact, common. There is a long ing rural communities of property rights and control over was one of the central issues in the constitutional reform well as the natural resources associated with those lands. It is history of contract farming in the agricultural sector across the economic value of natural resources, incentives for local process that arose in order to address the violence that took due to a historic anomaly, a deleterious legacy of colonialism, much of Africa. There has also been a great deal of innovation communities to conserve those resources are eroded. This is place across the country following the disputed 2007 general and the political priorities of post-independence governments in the tourism sector, with joint ventures between lodges and a major factor underlying high rates of rural deforestation in election. When the country passed its new constitution in that community land rights remain unrecognized – with so rural communities, which provide land and access to wildlife many African countries, as well as the uncontrolled illegal August 2010, land reforms were among the most prominent much land held by central governments in so many African and other natural attractions. These models generate greater hunting that has greatly depleted wildlife in many areas. features, in particular the provisions that reclassify “trust states today. Property rights are a basic foundation of economic local equity, control, and benefits. As a result, they mitigate lands” – which had been held by local governments and growth, prosperity, and human rights, making land reform a the risk of local conflicts that have been impacting many of widely mismanaged – as “community lands” to be held more central development priority across Africa. Some countries have the investments pushed through during the recent global directly by local-level groups of people. These lands comprise recently taken action or are planning reforms – for example, land rush. Such win-win arrangements that create new eco- about 70 percent of the total land area of the country. Kenya’s 2010 constitution represents a notable positive example nomic opportunities and market access for rural communities of far-reaching land tenure reform, and land is similarly high through partnerships with external expertise and capital will For private investors in agriculture, forestry, tourism, and on the agenda of Tanzania’s current constitutional reform be critical to the future of African economies. These business other renewable resource industries, these dynamics create process. Even the vast and complex Democratic Republic of models can also play a crucial role in helping to sustain Africa’s substantial risks. Many private investments in these land-based Congo, where nearly all land and forests are formally owned natural assets through the right combination of incentives activities in Africa today are taking place in a context of con- by the state, has embarked on a land policy development and devolved governance. tested property rights and weak governance. This creates risks, process that has the potential to bring about crucial reforms. both financial and reputational, for companies undertaking projects on the ground, as well as for their financial investors The second priority is to promote greater awareness of the and stakeholders. The underlying source of risk is that many challenges to national development aims and private invest- Fred Nelson is the Executive Director ments in land-based enterprises that the current land tenure of Maliasili Initiatives, an organization realities create – this includes the current mispricing of that promotes sustainable natural tenure risks in financial models of investments – and to resource management and conservation promote alternative investment models that mitigate these in Africa by focusing on building More than 75 % of all the world’s rhino today are found in South risks. The most essential element of such alternative models the capacity of leading local civil Africa. World Wildlife Fund (WWF) urges all South Africans to be is to shift from the prevalent current pattern, where investors society organizations and facilitating proud of the natural heritage. in African countries are often allocated landholdings directly collaborative approaches.

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aFrica Good Practices World Cocoa Foundation

Approximately 70 percent of the world’s cocoa currently comes from West and Central Africa. The vast majority of this cocoa is grown on nearly two million small, independ- ent family farms that are less than 2 hectares (5 acres) in size. The World Cocoa Foundation (WCF) promotes a sustainable cocoa economy through economic and social development and environmental stewardship in cocoa-growing communities.

African cocoa farmers and their families face a number of chal- lenges: low yields; pests and diseases that attack their cocoa trees; difficulty obtaining farming supplies; and limited access to credit. As with other rural communities in sub-Saharan WCF works to address these issues in West and Central Africa Africa, cocoa-growing communities often have low levels of through three flagship programs: WCF Cocoa Livelihoods adult literacy, face health risks such as malaria and HIV/AIDS, Program, WCF ECHOES, and the WCF African Cocoa Initiative. and have difficulty with access to quality education for their WCF supports active programming in the following countries: children. WCF is empowering communities by training farm- Cameroon, Côte d’Ivoire, Ghana, Nigeria, and Liberia. ers, enhancing education, investing in families, and improving community health and welfare. worldcocoafoundation.org

Sustainable Energy Africa

Sustainable Energy Africa (SEA) promotes the development use of conventional energy, the transition to more sustainable of a low-carbon, clean-energy economy throughout southern energies such as solar and wind power, and a holistic view of Cotton Made in Africa Africa. Through their work, SEA promotes the more efficient sustainable living more generally.

South Africa is in an enviable position with regard to natural Cotton made in Africa works on the principles of a social the smallholder farmers in Africa. This holistic approach pro- energy sources, and SEA sees itself at the forefront of debate business. That means the initiative operates in accordance vides a win-win situation for everyone involved. The partners on not only sustainable and cost-efficient energy supply, with sound business methods, except that it does not aim to of the Demand Alliance receive cotton produced in accord- but also climate change and environmental issues. A large maximize the profits of individuals, but rather to improve the ance with a social and ecological standard, without paying component of the work has been in supporting government conditions of life of a large number of African cotton farmers. a significantly higher price for it. The African smallholder – particularly local government, and more recently provincial In order to do that, it is building an alliance of international farmers and their families receive several advantages – they government – in understanding sustainable energy issues; retail companies that has targeted demand in the global market learn more-efficient growing methods, meaning that they developing strategies, policies, and planning that facilitate a for sustainably produced cotton and that uses this material in can improve their incomes through better yields, and they move toward sustainable development; and very importantly, its products. Cotton made in Africa acts in accordance with the benefit from social projects such as improvements to schools. assisting and supporting their implementation. rules of the market, avoiding subsidies or interventions in the system of world market prices, which are dependent on supply One of the special features of Cotton made in Africa is the veri- The theme of sustainable energy underpins all of their work. As and demand, as are the prices of practically all raw materials. fication system. It works through the cotton companies, and a dynamic, people-centered, and driven NGO, they act essentially thus involves lower verification costs than certification systems as a consultative agency providing research, capacity-building, In return for the right to produce garments labeled “Cotton that work through the individual farmers or groups of farmers. and assistance with project implementation as well as skills made in Africa,” the members of the Demand Alliance pay That means a large proportion of the license fees received will, that cover engineering, environmental science, education, license fees. The surplus from this is passed on in accordance in the future, benefit the farmers and their families directly. and urban and regional planning. with the principles of a social business to the partners who have made the label possible by means of their work, namely cotton-made-in-africa.com sustainable.org.za

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Selected Activities in 2012

aFrica Uganda

Nigeria A Women’s Executive Conference was hosted by the Uganda Network, and coincided with the graduation of nine women The Global Compact Network Nigeria held a session covering enrolled in the Federation of Uganda Employers Female Future The efforts made by companies and partners in Nigeria to increase Programme – a nine-month executive training programme to access to clean and renewable energy resources in rural settings. elevate women into executive roles in Ugandan corporations.

UN Global Compact Kenya Ghana in Africa The Global Compact Network Kenya organized a half-day The Global Compact Network Ghana teamed up with the roundtable event to discuss emerging issues on human rights. Ghana Chamber of Mines to organize a two-day residential The event was hosted by a participant of the Local Network training seminar under the theme of “Environmental and and provided a space for companies to engage, discuss, and Social Responsibility: Key to Sustainable Mining.” The semi- increase their knowledge on the intersection of human rights nar covered corporate sustainability guidelines for mining and business within the Kenyan context. The event successfully companies in regards to the utilization of mineral royalties brought together participants and introduced them to the and water quality management, as well as proper procedures Global Compact Human Rights Self Assessment Tool as well for mine closures and new regulations that are set to impact as international trends on managing human rights risks. A companies in this sector. The event successfully created a presentation on the implications of the Kenyan Constitution’s space for mining companies to discuss issues and ideas with Bill of Rights on companies was also introduced. The host one another and move forward on the environmental agenda. company also shared its experiences regarding these themes, including a best practice case study that other companies could learn from and apply to their own systems and processes. South Africa

The South Africa Network partnered with the National Business Nigeria Initiative to host a roundtable discussion on anti-corruption collective action measures in the construction sector. Over the As part of its contribution to the Siemens Integrity Initiative, course of the discussion, companies learned about current the Nigeria Network hosted a collective action workshop with initiatives, explored additional collective measures to address a focus on “Openness and Transparency: A Stakeholder Com- corruption in their sector, and shared best practices from other mitment against Corruption.” A wide range of participants at- countries and sectors that could be applied to the construction tended the two-day meeting, including top business executives, industry in South Africa. Presentations provided guidance to government agencies, civil society, and media. The workshop companies in determining what measures were most suitable was an opportunity to promote dialogue among the various for their context, and provided updates on government ini- stakeholders using breakout sessions and small group discus- tiatives and regulations. Participating companies agreed that Formal Network sions along thematic areas of interest. Nearly 130 people were in corruption has become a major issue in South Africa and that attendance, signaling a strong commitment to anti-corruption business should set positive examples in order to influence Established Network measures and an interest in sharing and following the strong change. Participants agreed to several next steps, including examples of good corporate business practice. pursuing partnerships with existing initiatives, expanding Emerging Network representation of companies in the sector, and continuing conversations and meetings on the issue moving forward. Uganda

Source: UN Global Compact website/Local Networks, Status: 07/12/13 The Turkey and Uganda Local Networks partnered with Eu- South Africa ropean government representatives and donor agencies to host a session on biodiversity and ecosystem services. The The Global Compact Network South Africa provided an over- session was an example of South-South cooperation, whereby view of programmes throughout Southern Africa aimed at participants engaged in discussions on how businesses are establishing a green economy. Presentations explored synergies mitigating and offsetting their biodiversity impacts. Models and areas for regional cooperation, and the potential opportu- of innovative public-private partnerships were shared as well nities created by these initiatives in areas such as enterprise as ways in which these can contribute to conservation efforts development to job creation, and the renewal of commercial and thrive in competitive markets. and residential environments.

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aFrica

“Renewed Energy for Women’s Empowerment”

Interview with head of UN Women in southern Africa

Nomcebo Manzini is a busy woman. As the regional director for southern Africa and the Indian Ocean islands of the UN’s recently created Entity for Gender Equality and the Empowerment of Women – officially known as UN Women – she is constantly on the road from one country to another, addressing public gatherings, attending conferences, and strategizing with government officials and women activists alike. Africa Renewal’s managing editor, Ernest Harsch, was fortunate to catch Ms. Manzini at her home in Johannesburg, South Africa, in late March 2011, during a brief stopover in her travels.

Harsch: In South Africa and Mozambique, women have reached the Beyond getting into office, how can women better engage with broader The problem is the resources. We are not getting enough funds dimensions of policing and security, also gender-based violence. benchmark of 30 percent women’s representation in parliament. What’s governance issues, including political conflicts? from national budgets or from the donor community. African We had a conference to talk about how we can support the the picture across southern Africa? heads of state launched the campaign in Africa in January SADC gender unit to mainstream gender in the SADC Organ One of the things that UN Women is doing is building capaci- 2010. We are now doing advocacy with the different heads of on Politics, Defence, and Security. We talked about ensuring Ms. Manzini: As a sub-region we certainly have a long way to ties for women to participate in leadership, but transformative state to ensure that their ministries of planning and finance that the officers who go on peacekeeping missions have some go. A few countries have been doing well, but there are others leadership, so that they can engage from a perspective of basic allocate funds for implementing the national action plans. gender training. that have regressed. In terms of women in political leadership human rights and understand broader governance issues and positions, the average is only 18 percent. It is way below the democracy in general. Some countries are in deep conflict. Our We have safer cities programs that we will be rolling out We are also looking at the informal justice sector. In southern 30 percent level we have been calling for, and far below the position is to support women to participate in negotiations, in in several countries in cooperation with UNICEF. Research Africa, research clearly shows that when women experience 50 cent level that the heads of state and government agreed mediation, but also in prevention. In Comoros, for instance, shows that rape of young girls is normally of school children abuse or violence in the home, they do not go to the police to in signing the Gender and Development Protocol [of the we are working within the context of the UN country team in the early morning when they are going to school, and in as a first port of call. They go either to their families or to Southern African Development Community – SADC]. We on a peacebuilding project. Our contribution is to build the the evening when they are going back home, often through traditional leadership. are seeing a lot of change at the local level. Most countries skills of women to understand the issues of gender relations thick bushes and other unsafe pathways. But when we talk seem to be doing much better in terms of representation in in peace, in peacebuilding, even in conflicts and how conflicts to governments about this, they hardly have the resources to There has been real progress in narrowing the gap between boys and local governments. This might be because women work in the happen. Even if they understand that, they need to build al- provide sanitation and water to communities. They do not girls entering primary school. But do the girls stay in school? community and are better known at that level. lies within the traditional leaderships, among men, with their see it as a priority. partners, etc. We try to engage a more holistic approach to That is a fundamental point. Looking at many countries, we Women’s political representation is absolutely important dealing with such issues. And the judicial and security systems? find that there is parity in terms of entry. In some countries, because participation is a basic human right. Women bring girls are even surpassing boys in entering basic education. their experiences, knowledge, and capacities, which are dif- UN Women coordinates the Africa Unite campaign, which targets We are working with the police, military, and other entities in But as you move further into the school years and you get ferent from those that men bring. violence against women and girls. What is the main challenge? the security sector to make sure they understand the gender into grades seven and eight, there are fewer girls continuing

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It is because of the advocacy that has been coming from the aFrica women’s movements and from the ministries responsible for women and gender issues.

At UN Women we are working with five governments in the sub-region in a pilot program to see exactly what women are doing to get out of poverty. Most of these women are in what is called the informal sector, and their work is not recognized. The women who kept the Zimbabwe economy going at the lowest point in its history are not recognized even today. Yet, they ensured the survival of their families and the economy. It is absolutely essential to deal with the economic empower- ment of women, because we know that when women have that economic independence, they are more likely to be able to make decisions about their dignity, their security, and their welfare.

Does UN Women work with rural women?

We are currently looking to raise $ 33 million in funds for a project to do exactly that, to work with rural women, particu- larly rural women farmers. It is a major challenge. At least CSR in South Africa 70 percent of the labor in agriculture is provided by women. When we seek $ 33 million, that is a drop in the ocean re- ally – it is nothing in terms of the need. And what happens when the $ 33 million is gone? We need to be able to define Professor Ralph Hamann is Research Director for the Graduate School of Business at the in school. Parents are more likely to withdraw the girls from programs that governments include in their own national University of Cape Town. His areas of expertise include Corporate Citizenship and Corporate school if they are cash-strapped – or if the girls are going to development plans. And governments must be able to desist get married. The other problem is that pregnancy in schools from corruption. It is not that the national resources are not Social Responsibility. In 2006 he was involved as a researcher at the UN Global Compact is very high and girls will drop out to have the babies. Girls there, but they are misused. Learning Forum, which took place in Ghana. For the UN Global Compact International also tend to have more work to do in the home, so they have Yearbook, Hamann highlights the “paradox for CSR in South Africa” and beyond. less time to study and therefore tend to have a lower passing UN Women has just been created, merging four different UN entities rate than the boys. that dealt with women. For women here in southern Africa, what dif- ference can UN Women make? Southern Africa has the highest HIV prevalence rates in the world. How are women affected? What I see already is just an amazing amount of renewed National Concept of CSR example, Anglo American and others established in 1978 energy for women’s empowerment in the various areas of (after the Soweto riots) the Urban Foundation, which played So much money has come through for programs against HIV work since the creation of UN Women – renewed hope in- In light of South Africa’s history, is there a specific South African view an important role in building schools and houses in Soweto and AIDS. But the work has not taken into account the clear deed that UN Women will do things better and faster in pro- on corporate social responsibility (CSR)? and elsewhere, and also in advocating policy changes (less connection between gender inequality and the spread of HIV/ moting women’s rights globally. It is a very tough call for us strict pass laws). The Urban Foundation is a precursor to the AIDS. In some southern African countries, there are 5 percent of in UN Women to deliver on that. Prof. Hamann: The historical context has provided a paradox National Business Initiative. men with HIV, but you find 20 to 22 percent of young women regarding CSR in South Africa. On the one hand, corpora- of the same age group with HIV. When you do the research, it tions are implicated in the design of the apartheid economy The apartheid legacy obviously creates particular social chal- is very much: “I didn’t want to sleep with him, but he forced and migrant labor system, specifically, as well as associated lenges, which have become priorities for companies’ corporate me.” And then there is the whole issue of “survival sex” in human rights abuses. As argued by the Truth and Reconcili- social investment (CSI) programs. These investments focus on southern Africa, where young girls will sleep with older men ation Commission, “grand apartheid was not an Afrikaner education, health, and small enterprise development. Unfortu- so that they are able to go to school. This interview was originally published state invention, but was created by the mines” (paraphrased). nately, many companies still think that CSR is primarily about in Africa Renewal, Special Edition This historical legacy still lingers in the pervasive distrust CSI. My criticism is that companies focus on giving away a And women are also more likely than men to be in poverty … on Women 2012, produced by the between big (white) business and the post-1994 government. small proportion of their profits without really understanding Africa Section of the United Nations For those distrustful of business, CSR will remain a fig leaf. and responding to the social implications of their core business It seems as though even our governments have now acknowl- Department of Public Information. On the other hand, large companies recognized – at least practices. I hardly use the term CSR anymore, partly due to edged that development is not going to happen without the www.un.org/africarenewal/magazine/ in the 1970s – that the increasingly severe policies of the this confusion. We rather emphasize the need to understand full involvement and participation of women in the economy. special-edition-women-2012/‘renewed- apartheid government were leading to social unrest that would the broader social-ecological context in companies’ strategy But they have not just all of a sudden become benevolent. energy-women’s-empowerment’ have negative consequences for business. As a prominent design and implementation.

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With the fall of Apartheid in 1994, did South African companies im- This is a significant challenge. On the one hand, some compa- social impacts, mines, of course, also have far-reaching envi- plement CSR programs voluntarily or did they rather feel the pressure nies are beginning to fill this gap because they recognize that ronmental impacts, which, in turn, have social implications. of democratization and the need to comply with international labor some minimum provision of public goods and rule enforce- standards? ment is necessary for their business, and also desired by local Has the “Marikana incident” led to a rethinking among mining compa- stakeholders. On the other hand, this is problematic because nies about the way in which they tackle social wrongs around mining After 1994, many companies were keen to build their legiti- it may create a dependency on companies. This is not just a sites? (In August 2012 more than 40 people died in a wildcat strike at macy and create a good impression with the new government. phenomenon in places such as the DRC; it is also happening Lonmin’s Marikana mine.) Much of this was done through CSI, as mentioned above. in South Africa, where some municipalities are just unable Many companies built schools, for instance. In parallel, the to provide public services. I think the big challenge is for There has been much debate and some important suggestions new government embarked on an ambitious policy and companies to contribute to developing state capacity, without have been made, for example changing the migrant labor law review, based on the 1996 Constitution. These included co-opting the state to suit their interests. arrangements so that migrants return home more often. But progressive labor relations, occupational health and safety, I have not heard of any actual changes being implemented. anti-discrimination, environmental and natural resource Environment and Green Business laws (most of which were published in the latter half of the There is a discussion about the “de facto government” of mining com- 1990s). These have had an important impact on the regula- Woolworths’ managers in South Africa set out to develop a program panies in the informal settlements around mining sites, in addition to tory pressures on business, though the state’s enforcement of direct engagement with the farmers in their supply chain to enhance some social investments that are territorial. Is there a real risk of mining capacity has been limited. I have argued that there is thus their productivity, focusing in part on irrigation techniques. Is this a rare communities being at the sole mercy of those “mining governments,” a quasi-voluntary character to legal compliance, especially example of “green economy,” or is this sector on the rise in South Africa? instead of a local government? if companies attempt to comply with the spirit of this new What is its status today when compared to industrialized countries? legislation, rather than merely the letter. Yes, some communities are becoming very dependent on min- I think the Woolworths “Farming for the Future” (FfF) program ing companies. This is a problem because the companies are Then, of course, there was the black economic empowerment is quite unusual. You have a company with significant public not formally accountable to the communities. Of course the policy, which was also promulgated as an act, as well as subject sustainability commitments made by the CEO, and you also problem is amplified when the mine scales-down or closes. of numerous sector-specific “charters.” This sought to address have a sophisticated middle management that was capable of the racially skewed ownership and management structures in and New York stock exchanges, which have influenced some sensing the problems encountered by farmers. Also pertinent Anti-Corruption the economy. One of the most prominent charters was the one of the big South African companies that have listed there, is this company’s emphasis on high-quality, fresh produce in the mining industry (2002), and a bit later in the finance and which have provided some “best practice” leadership in and emphasis on long-term relationships with key farmers … Corruption is a significant problem in South African society. sector. Many of these charters were the result of corporatist South Africa. these factors provided the motives and the capabilities for the Local Global Compact Network advised the sectors of healthcare (business-government-stakeholder) negotiations, and they FfF program. Though I have said that initiatives such as FfF and construction, and the awarding of mining licenses should identified sector-specific targets for ensuring: ownership of Human Rights are unusual, I think more companies are recognizing their be more closely scrutinized. What are your recommendations? companies would be transferred to black people; management reliance on a sustainable value chain, and they are thinking positions would be held by black people; and employment In a report, you said that UN attempts to formally apply international about more systemic approaches to addressing these problems. UN Global Compact companies should collectively emphasize equity / affirmative action. There were also sector-specific tar- human rights laws in the private sector in 1990 and 2003 were un- Another prominent example is SAB’s work on water. the transparency movement, including a call for all party gets – for example, conversion of hostels in the mining sector, successful. What does the link look like in sub-Saharan Africa today? funding to be made public. The fact that this is being resisted increased access to banking in the finance sector. Generally, In the run-up to Rio+20, you said there will be much discussion on the by the African National Congress and opposition parties is there was an expectation that about 1 percent of profit would Well, those earlier attempts subsequently led to the appoint- transfer of environmental technologies to developing countries. Has the deeply problematic. It would be great for companies to make a go toward socio-economic development, that is, CSI. ment of John Ruggie as UN Special Representative on business 2012 conference resulted in any real progress for African companies’ CSR? committed stand on this. It would have far-reaching effects. and human rights. His “three pillars” framework has been What are the drivers of CSR in South Africa? Is it merely voluntary? very helpful and influential, in that it clarifies and codifies None that I am aware of. Or is it the government, for example by regulating the Johannesburg what is expected of business. The second – and final – re- Stock Exchange (JSE) or labor laws? port by Ruggie was published in 2011, and since then there Labor Standards have been numerous initiatives to provide companies with There is a confluence of drivers, and their influence also var- more detailed guidance. There is more scope, however, for For which reasons do mining companies take a special role in the South ies, depending on the sector and size of the company, as well companies to recognize human rights as the overarching African and sub-Saharan African private sector when it comes to CSR? as the specific social or environmental issue that is at stake. framework that guides their CSR activities. At the same time, I think state regulations have been very important, especially the human rights framing emphasizes “do no harm,” and it Mining is the foundation for the development of the southern in areas such as labor relations and environmental protection. leaves out the opportunities for business to make positive African economy, as well as the development of the state and The state’s enforcement capacity has been a problem, especially contributions through processes, products, business models, colonial and apartheid economic systems. The migrant labor in small, dispersed operations. Public regulations have also or systems innovations. system had significant implications for the development of been important. This includes the JSE’s listing requirements, towns, as well as the (under) development of rural areas. Mining which rely on the King codes of corporate governance. The lat- In conflict zones, such as in parts of the Democratic Republic of Congo still has significant economic significance and employs large Ralph Hamann is research director ter has been very influential in driving sustainability reporting (DRC) and Rwanda, we experience the problem of “limited statehood” numbers of unionized workers. In areas such as Rustenburg, and associate professor at the and, more recently, integrated reporting. There have also been and hence a lack of human rights and responsibility toward communi- mining accounts for an overwhelming proportion of employ- Graduate School of Business, international pressures, including regulations of the London ties. Can and should companies’ CSR fill this gap? ment and economic development. Over and above significant University of Cape Town (UCT).

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aFrica

By Prof. Bonnie Campbell

The issue of corporate social responsibility (CSR), as it relates to the mining sector, has emerged in a particular historical context. Several decades of reform that liberalized regulatory frameworks and mining codes in mineral-rich countries of Africa in order to encourage investment has contributed to redefining the role and functions of mineral-rich states, as well as contributed to the shift of what were formerly considered state functions to private actors – often large transnational mining companies. In the context of the weakened institutional and political capacities of states – and consequently of their weakened capacity to pursue developmental objectives, to enforce regulations in areas of key importance to communi- ties, and to meet national economic objectives, along with the trend of transferring public responsibilities to private actors – issues of legitimacy have emerged about the operations of mining companies themselves. Such a redefinition of spheres of authority and responsibility in situations of declining public resources – compounded by the fact that mineral-rich states have become less able to ensure the needed monitoring, follow- up, and, if necessary, bring in remedial measures –has called into question the regulatory role of states, hence creating a legitimacy gap, which inevitably impacts on the activities of mining enterprises.

While past and current trends may have allowed governments to shift the locus of responsibility for what were previously considered state functions – including public service delivery (clinics, roads, infrastructure, security, etc.) as well as rule- setting and implementation and mediation – to the private operators of large-scale mining projects and NGOs (which helps explain the pressures on companies to introduce CSR projects in order to gain a social license to operate), such transfers are problematic for several reasons. With regard to the origins of CSR projects, they are most often the result of externally-driven initiatives rather than ideas emanating from a domestic policy process and as integral parts of locally- owned public policies. Moreover, not only do they silence the legitimate, and indeed necessary, right of governments to offer CSR and Development services to their populations – a precondition to their being held publicly accountable – they also contribute to obscur- ing the issue of government responsibility itself. The current in Africa sidestepping of the state – by suggesting companies can gain better legitimacy for their operations by offering social services – runs the risk of undermining a precondition for Redefining the Roles and Responsibilities of building responsible governments and the basis of democratic practice: the need to hold governments publicly accountable. Public and Private Actors in the Mining Sector The blurring of lines of responsibility of public, as opposed

66 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 67 Agenda CSR in Africa

to private, actors is a key element in explaining why – in and access to land rights, the distribution of influence and appropriate public policies and state interventions needed in the mining industry’s obligations regarding social development situations when differences of opinion among stakeholders authority among actors, and the choice of the development order to plan strategically, regulate, and monitor investment objectives. Indicators needed to assess the impact of good CSR arise over land rights or compensation, for example – there agenda being implemented. Beyond the fact that such CSR as well as to ensure that the presence of the private sector be projects must be built into a nationally derived framework are increasing risks of a degeneration into violent conflicts. strategies are usually externally driven and raise issues of harnessed to meet the development objectives determined by and applied by a range of stakeholders, including civil soci- local appropriation and sustainability beyond the life of a the countries and the governments concerned. ety. The framework must focus on stakeholder consultation There have been different responses to these issues of legitimacy particular project, they not only fail to address the issue of and allow for a review of obligations and commitments. This emanating from different arenas, including the multilateral the regulatory authority of states, but by sidestepping the A useful example of recognition of the above is a 2011 re- review must be based on reporting requirements that should level – as, for example, though the production of international state, they may even contribute to postponing the conditions port of the United Nations Economic Commission for Africa be part of the CSR framework. norms to which companies are invited to adhere, such as in necessary for resolving the problems of legitimacy that they (UNECA), which sets out recommendations for the mining the area of environmental impact assessments or involuntary are intended to address. sector in Africa in order to encourage it to become a catalyst In the end, companies have the following responsibilities: displacements. However, such “transnational legal frameworks” for sustainable, intergenerational, and equitable development. 1) Signing contracts in a transparent manner and making leave unresolved the key issue of enforcement, as they do not The issue of legitimacy that companies increasingly face can With regard to CSR, the report is clear: “From a policy perspec- these public; 2) paying fair royalties and taxes in a transparent address the problem of the capacity of states to ensure their be seen as a consequence of evolving structural relations that tive, CSR initiatives should not be considered a substitute for manner; 3) respecting the laws of the country in which they implementation and to bring in corrective measures if neces- have resulted, at least in part, from the manner in which the government responsibility toward its citizens in providing operate, international obligations, and human rights obliga- sary. There have also been proposals from bilateral agencies, mining sector has been reformed. These structural relations basic infrastructure and other public goods. Indeed, CSR ini- tions. Should companies wish to contribute in other ways to such as the production of tool kits to better manage situations have significantly modified – and sometimes obscured – the tiatives should complement government efforts through local the sustainable development of the countries in which they of risk and potential conflict. These initiatives similarly fail to demarcation of spheres of responsibilities, whether public or government institutions and local authorities.” operate, the guidelines set out by UNECA leave little doubt address the origins of such conflicts, which often concern the private, and have frequently also blurred distinctions between as to how best to proceed. perceived legitimacy of the positions held by different stakehold- the political and the technical domains. Such a perspective Significantly, CSR projects could reduce the motivation of ers (communities as opposed to companies), about whether to underlines the importance of taking into account the reforms governments to fulfill their responsibilities to citizens, and proceed with a particular project, the conditions under which at the origin of the reshaping of institutional arrangements, the latter could come to see the company as the provider of it is undertaken, or the distribution of the revenues it produces. the structural relations of influence and authority that char- those services for which they should be looking to the state. acterize these reforms, and the roles and responsibilities of Better coordination between the planning and investment Finally and a third type of response are CSR projects put the various actors involved. of the state and corporate outlays under CSR could improve forward by private actors with a view of obtaining a social the value of both streams of expenditure. For example, the license to operate. While one can understand the motiva- Moreover, strategies of CSR often appear premised on the faulty sustainable use of a school or clinic built as part of a CSR tion behind such initiatives, by their very nature and origin hypothesis that it is investments initiated by private compa- strategy is more likely if the project is coordinated with the they are most likely to be attempts to respond to commu- nies that are going to drive development. In fact, there is no state to ensure that it fits into a larger plan and that the state nity grievances – that is, symptoms or manifestations of historical example anywhere on the earth whereby sustainable can support health staff or teachers should the mine halt its Bonnie Campbell is Professor at the the problems at hand – rather than an addressing of their growth, social and economic development, and poverty reduc- support. Finally, the norms according to which CSR initiatives University of Quebec in Montreal, causes, namely, issues such as the control over resources tion took place through private investment in the absence of are undertaken should be part of a national policy debate on Faculty of Political Science and Law.

68 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 69 98 Adecco Group GOOD 74 Air France KLM 168 Arab African International Bank 110 Audi Practice 76 Ayeyarwady Bank 136 BASF 80 Bayer 100 Bosch Solely responsible for the editorial contributions 136 170 Bradesco CSR Management under the heading "Good Practice" are the companies 130 Business Keeper and their authors themselves. BASF 112 Camfil Coca-Cola Deutschland 152 Camposol HOCHTIEF 140 Coca-Cola Deutschland MAN 82 Consolidated Contractors Company 74 Ricoh 154 Coop 153 Copeinca Human Rights Volkswagen 114 Deutsche Post DHL Air France KLM 118 Deutsche Telekom Ayeyarwady Bank 120 EDF Group Bayer 152 84 Green Delta Insurance Development Consolidated Contractors Company 122 Grundfos Green Delta Insurance 142 Hochtief Camposol Medcom 156 Itochu Copeinca Novo Nordisk 144 MAN 110 Coop Sakhalin Energy Environment 102 ManpowerGroup ITOCHU SK 86 Medcom Nestlé Teck Audi 126 MTU Aero Engines Prosegur The TMS Group Camfil 158 Nestlé Sanofi Deutsche Post DHL 88 Novo Nordisk TÜV Rheinland Deutsche Telekom 160 Prosegur EDF Group 148 Ricoh 98 Grundfos 172 Royal Bank of Scotland Group Labour Standards MTU Aero Engines 168 104 Saga Furs Sakhalin Energy Financial Markets 90 Sakhalin Energy Adecco Group 128 Sakhalin Energy Bosch Arab African International Bank 162 Sanofi ManpowerGroup Bradesco 92 SK Saga Furs 130 Royal Bank of Scotland Group 94 Teck Weidmüller Anti-Corruption 132 Thales Business Keeper 96 The TMS Group Thales 166 TÜV Rheinland 150 Volkswagen 106 Weidmüller

70 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 71 Good Practice

Human Rights

74 Air France KLM 76 Ayeyarwady Bank 80 Bayer 82 Consolidated Contractors Company 84 Green Delta Insurance 86 Medcom 88 Novo Nordisk 90 Sakhalin Energy 92 SK 94 Teck 96 The TMS Group

Labour Standards

98 Adecco Group 100 Bosch 102 ManpowerGroup 104 Saga Furs 106 Weidmüller

Human Rights Labour STANDARDS

Principle 1: Businesses should support and respect the Principle 3: Businesses should uphold the freedom of association Principle 5: the effective abolition of child protection of internationally proclaimed human rights; and and the effective recognition of the right to collective bargaining; labour; and

Principle 2: make sure that they are not complicit in Principle 4: the elimination of all forms of forced and compulsory Principle 6: the elimination of discrimination in human rights abuses. labour; respect of employment and occupation.

72 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 73 Good Practice Human Rights

The Air France Foundation Air France has also been supporting hu- KLM is currently working with the fol- Children: A Universal manitarian programs through long-time lowing partners: In 2012, the Air France Foundation cel- partnerships with different associations: ebrated 20 years of supporting children • Wings of Support – the KLM and Mar- in need. With the support of NGOs, the • Acting for Life, which is committed, tinair foundation staff with more than AIR FRANCE KLM Cause Foundation contributes to projects in fa- among other actions, to protecting 3,000 volunteers managing more than vor of sick, disabled, and underprivileged children in distress; 300 projects worldwide; children by facilitating access to educa- • ECPAT International, which informs • Doctor2Doctor – a cooperation be- tion, training, and cultural activities. passengers about the damage caused tween Amsterdam University Medical By Corinne Bélière, Air France KLM by child sex tourism; Center, KLM Health Services, and Kenya The Foundation has made helping street • Aviation without Borders (created by Airways; children one of its priorities, providing pilots), which transports medical sup- • Aviation Without Borders – support- Air France KLM’s mission is to connect people around the world. Some 72 million people funding for the highest number of pro- plies and also ill children who cannot ing regional and international medical of all ages, languages, and cultures travel each year on board our aircraft. The attentive jects worldwide. In the face of extreme be treated where they are; transports in and from/to Africa; poverty, the associations work relent- • NGOs that offer medical assistance • Medical Knowledge Institute – han- service provided to each and every one of our passengers has led the Group toward a better lessly to bring these children back into and transport medical supplies and dling health and sanitation in the town- understanding of its customers and their expectations over the years. This approach, which mainstream society and give them op- children suffering from rare diseases ships in South Africa by deploying encompasses much more than simple flight services, extends to the destinations and regions portunities to pursue their educations. to specialized medical centers, and health workers; When, in 2010, Haiti was devastated help transport doctors and surgeons • Aflatoun – offering educational pro- where the Group is present and to the people who live there. by an earthquake that left the country to poverty-stricken areas. grams worldwide; completely desolate, the Foundation im- • Get It Done – a social media fundrais- mediately rallied to provide support and ing network with many appealing pro- assistance. Two days after the earthquake, KLM AirCares jects set up by passionate youngsters; Through its international presence, the local populations. Air France and KLM Corporate Foundation and KLM AirCares the Foundation launched a fundrais- • Close the Gap – a Belgian nonprofit Group contributes to the economic and each offer their own social and environ- program – combined with local actions ing campaign with Air France and KLM The KLM AirCares program supports a organization working to shorten the social development of the countries it mental programs, but there is one cause and the support of (or at the initiative staff, with a view to rebuilding a school number of NGOs that contribute through distance between developed and de- serves by using local resources, promot- that they are both principally committed of) company staff – this commitment that was ready to welcome 2,500 chil- their projects to medical, educational, veloping nations in terms of computer ing skills development, and rallying local to: helping children and young people. takes the form of concrete actions and dren between the ages of 6 and 16 a few and/or sanitation needs for communities hardware and know-how. They support players and staff around projects for the Through the work of the Air France long-term investments. months later. in developing countries, with a focus on 76 projects in 16 African countries. children and giving them good founda- The computers are used mainly for Beyond the material and financial as- tions for their futures. education, but information and com- pects, the Foundation wishes to develop munication technologies are used for its actions. For instance, by creating The program was set up in 1999 and con- education and awareness programs the Corporate Foundation Club, which sisted of supporting four NGOs per year and for HIV/AIDS prevention. With groups together some 30 major French via a new project every quarter. Since the opening of an e-waste facility in companies, its aim is to pool different then more than 40 charitable organiza- Nairobi, Close the Gap computers are experiences in order to increase the im- tions have had their projects supported sustainable and certified to be disman- pacts of its actions and conduct more through financial sponsorship and free tled for reuse of metals and materials, long-term projects. Furthermore, the freight capacity. thereby providing jobs for the local Foundation is looking into ways for as- community. sociations to offer psychological support In recent years a shift has taken place. to street children. KLM has chosen to focus on specific part- Flying Blue members are invited to ners to support their social projects over donate their frequent flyer miles to Since 1992, there have been 856 pro- the long term. In this way, organizations NGOs selected by Air France and KLM grams funded in 80 countries. The Foun- benefit from the long-term sponsorship AirCares. In 2012 there were 64 million dation has a network of 2,200 volunteers of KLM. Currently, KLM is working with miles donated to all social partners and has been sponsored by numerous seven NGOs that were selected on the combined. celebrities (Mstislav Rostropovitch, Javiez criteria that they contribute to basic Perez de Cuellar, Boris Cyrulnik, Miguel education, health, and sanitation needs. Angel Estrella, Olga Havlova, and Dan- They also needed to be active in those iel Alagille, among others). Each year, destinations that KLM flies to. KLM offers For more information, please visit charities are honored for their efforts to these partners freight support, logistics the following websites: improve the living conditions of young expertise, exposure, hands-on help, and www.airfrance.com people and give them a better future. active promotion. www.klmtakescare.com

74 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 75 Good Practice Human Rights

ank Ever since its inception in August 2010, B Ayeyarwady Bank’s Ayeyarwady Bank has recognized that the mere existence of the organization and the operations it engages in impact on the communities at large. With its Commitment to the mission to be a leading bank in the yeyarwady

A country in the long run, the Bank also realizes that the communities plays an Community important role for the Bank in achiev- ing its sustainable growth. Hence, one of the priorities for Ayeyarwady Bank is its commitment to be a positive force in By May Myat Thu, Ayeyarwady Bank AYA Bank the communities in which it operates by contributing to the people and their communities as a whole. As the Bank’s Ayeyarwady Bank commits to making the United Nations Global Compact’s Ten Principles slogan “Your Trusted Partner” states, the part of its strategies and practices, focusing on fulfilling corporate social responsibility Bank endeavors to be a trusted partner to the people and the communities for their toward the communities it serves. banking and financial needs as well as to be a partner that those communities can reach out to.

In a rapidly-changing world with high before. The implications of this change may have to consider and respond to. Ayeyarwady Bank invests a significant population growth, it is apparent that for the business arena are indeed over- Attitudes of businesses and their relation- amount of time and funds into vari- the impact of our activities and actions whelming, as there are needs and ex- ship with society are therefore shaped ous social initiatives that the Bank’s are being felt in more ways than it was pectations of society that businesses by society’s diverse needs. workforce actively participates in. In a Ayeyarwady Bank and the Complete restoration work was done on country such as Myanmar, which has United Nations Global Compact a former government building, which spent many years in isolation, there was converted into a hospital with mod- are still numerous areas left underde- After just two years in operation, in Au- ern facilities and all the required medi- veloped. Therefore, the focus of Ayeyar- gust 2012 Ayeyarwady Bank became a cal equipment. The completed hospital wady Bank for the past two years has participant of the United Nations Global was then handed over to the relevant been on developing and improving the Compact (UNGC) initiative. This was a authorities in March 2011. healthcare sector in the country. As the corporate milestone for Ayeyarwady saying goes, “health is wealth,” and only Bank, which is the first bank in Myanmar Ayeyarwady Bank’s contribution to the the healthy will be able to work hard to commit to making the Ten Principles Yankin Children’s Hospital was not just and contribute to society and help the of the Global Compact part of its business a monetary gesture. The Bank’s involve- economy to grow. operations and strategies. Incorporating ment will continue through its role in the Ten Principles into the Bank’s busi- handling the regular maintenance and Ayeyarwady Foundation to ness strategies and operations required upkeep of the hospital: The Bank’s work- represent Ayeyarwady Bank redesigning corporate policies as well force has been actively engaged in weekly as restructuring. voluntary services at the hospital to help Keeping the need to contribute to society with the maintenance and upkeep of the in mind, Ayeyarwady Bank has created a Yankin Children’s Hospital – hospital compound. foundation that aims to improve the so- Our very first contribution cial and living standards in the country – In addition, the Chairman, the Board of Ayeyarwady Foundation will represent Ayeyarwady Bank’s first and foremost Directors, and the Bank’s management all of its CSR activities. Every year since activity for helping to develop the team have also paid occasional visits to its inception in 2010, Ayeyarwady Bank healthcare sector started with the do- the hospital and its residents to ensure has contributed to society through the nation of a 550-bed children’s hospital that equipment is in working order and Foundation, which aims to support the in Yankin Township, Yangon, Myanmar. to provide any necessary assistance. Plans development of the country in the edu- Ayeyarwady Bank, along with its par- are also under way with a number of cation, healthcare, social, sport, as well ent company Max Myanmar Group of CSR activities to celebrate the second as religious sectors, with a specific focus Companies, contributed to the dona- anniversary of the Yankin Children’s on the healthcare sector. tion of the Yankin Children’s Hospital. Hospital in March 2013.

76 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 77 Good Practice Human Rights

ank In August 2012, Myanmar was hit yet The conflict in Rakhine State B again by floods across different states. BANK INFO The floods displaced more than 80,000 The Rakhine conflicts and riots – caused (As of April 2013) people, affecting a total of more than by clashes between ethnic Rakhine and 287,000 people. Ayeyarwady region was the Rohingya – has displaced more than the worst hit, affecting and displacing 100,000 people since it started in June • obtained license to operate yeyarwady

A about 48,000 people and destroying 2012. Buildings were set ablaze during banking services in July 2010 more than 136,000 acres of farmland, the riots, burning down more than 4,000 from the Central Bank of houses, roads, and bridges. Represent- houses. Once again representing the Myanmar. ing the Bank, Ayeyarwady Foundation Bank, Ayeyarwady Foundation stepped in • Commenced operations with generously offered donations in cash and to help the affected victims. Management the opening of its first Head in-kind for the affected victims. personnel from Ayeyarwady Bank and Office in Naypyitaw, Myanmar’s the volunteers from Ayeyarwady Founda- new capital, in August 2010. Extending reach to victims of tion went to the temporary displacement internal conflicts camps to offer victims donations in cash • Current number of branches and in-kind, such as medical supplies is 34, with a staff of more than Ayeyarwady Bank is aware that there and dried food stuffs. 1,500 across the country. are many people across the country in • Number of ATMs across the need of help – some of which include The Kachin conflict country: 50. the victims of internal conflicts within the country, thus extending our CSR Many civilians in the Kachin region are • A member of the Association further. It is apparent that Myanmar, a also affected by the conflicts among the of Banks in Myanmar, SWIFT, country made up of many ethnic groups, ethnic groups. The fighting and shootings and an active participant in the Ayeyarwady Bank donates dren’s Hospital through the Ayeyarwady Ayeyarwady Bank goes beyond the is still experiencing internal conflicts, have forced these civilians to flee from United Nations Global Compact. ambulances Foundation, the Bank initiated its very healthcare sector such as those in the states of Kachin and their homes and take up accommoda- first blood donation drive. The over- Rakhine. Reaching out to the victims of tions in the temporary displacement The country’s healthcare sector needs whelming response proved further the After its contribution in the healthcare such conflicts naturally became one of shelters set up by many humanitarian much help in terms of premises, facili- spirit of employees at Ayeyarwady Bank – sector, Ayeyarwady Bank began working our priorities. groups across the state. In an attempt ties, equipment, etc. To play a part in we are ready to help. toward contributing to society in times to reach out, Ayeyarwady Foundation, contributing to the sector, Ayeyarwady of need. Having witnessed the aftermath once again representing the Bank for Bank donated a total of six ambulances In cooperation with the National Blood of Cyclone Nargis, which hit the country its CSR activities, went to a number of on different occasions – two to the Bank, the Ayeyarwady Bank organized in 2008, Ayeyarwady Bank began plac- these shelters in December 2012 to offer Yankin Children’s Hospital and four to its second blood donation drive in early ing great emphasis on extending help much needed food supplies at the camps. the Ayeyarwady region. These activities 2013 at the very hospital they had do- to those in need – the people affected The glimpses of hope in people’s eyes at were all sponsored by the Ayeyarwady nated. It was also on this special occasion by the aftermath of natural disasters. the sight of the donors showed just how Foundation. that there was an urgent need for A-type much support they needed. blood for an emergency operation for a Floods across Myanmar Our blood donation drives child in one of the wards. As the A-type Ayeyarwady Bank and its workforce blood donor at the event recalled: “It Ranked first as the “most at risk” in Asia “Give life, give blood” – everyone at was indeed a really memorable moment Pacific, according to the UN Risk Model, By helping to improve the lives of those Ayeyarwady Bank strongly believes and for me, to know that my blood is giv- Myanmar is exposed to various natural in society does not mean that Ayeyar- practices this. ing life to a teeny weeny little girl who disasters such as floods, cyclones, etc. In wady Bank neglects those in its work- was fighting for her life.” The event has October 2011, heavy floods hit central force. Ayeyarwady Bank also reaches Many times, lives are lost because there proved to be even more successful as the Myanmar, in Magwe Division, destroying out to its current workforce of more is not enough blood, or because the size of the workforce has grown, as has more than 3,500 homes and 5,400 acres than 1,500 employees across the country required blood type is not available. Ay- the number of caring and giving hearts. of crops. More than 30,000 people were by having welfare funds allocated, by eyarwady Bank employees help those affected. In response to this unfortunate providing transport arrangements to in need and spare no expense, even This successful event has spurred Ay- event, Ayeyarwady Bank stepped in to ease their travels to and from work, as if it means giving their own blood as eyarwady Bank to continue to focus on provide for the victims of the flood – one well as by providing for lunch during proud donors. more such CSR activities to give to those of the Bank’s CSR activities in looking their workdays. These little acts have in need. Ayeyarwady Bank has since after the social welfare of people. Ayeyar- been well-appreciated by the employees In March 2011, when Ayeyarwady Bank planned to carry out regular blood dona- wady Bank offered cash donations to the and, hence, the employees are happy to and the Max Myanmar Group of Com- tion drives on a biannual basis to help victims of the flood while they were in be actively engaged in all of the Bank’s panies jointly donated the Yankin Chil- fulfill its corporate social responsibilities. their temporary shelters. corporate social initiatives.

78 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 79 Good Practice Human Rights ayer B Combating Child Labor in the Supply Chain in India

Child labor cannot simply be eliminated by decree. To this day it remains deeply rooted in many societies. In particular, subsistence farmers still frequently resort to child labor to manage their fields. Implementing the effective abolition of child labor may be laborious and time-consuming for businesses if child labor is the norm. Yet pursuing this approach is worthwhile in every way, as shown by an example from India.

and control as well as an incentive and Ultimately, the Bayer CropScience Child tion to eliminating child labor and at sanction scheme. Moreover, it focuses Care Program can be described as a genu- the same time help improve the lives of By Steffen Kurzawa, Bayer on: engaging local people and combin- ine win-win situation for all involved. Indian cotton farmers and their children. ing initiatives to improve education in Children now receive education instead That is why we have extended the Bayer local governmental schools; increasing of having to work in the fields, giving CropScience Child Care Program to other In India child labor can still be found in the effective abolition of child labor, it on how Bayer intended to combat child awareness about working the fields prof- them a better start in life. Farmers ac- crop cultivation areas in India. many parts of everyday life. Some years became clear very soon after the takeo- labor among contract farmers in India. itably without resorting to the use of quire a substantial volume of know-how ago, the International Labour Organiza- ver that child labor among the contract children; knowledge transfer concerning to improve their cultivation methods, tion (ILO) found that the subcontinent farmers was a significant issue. Initially, Bayer started working together sustainable crop production; vocational which has resulted in a better quality has the highest number of working chil- with industry partners that were facing training opportunities for children; as of the seeds produced, among other dren worldwide, with an estimated 5.6 A steep learning curve similar problems. That resulted in the well as communication strategies to raise benefits. Last but not least, research has A package of million working in agriculture alone. foundation of the Child Labor Elimina- awareness of the problem among parents. shown that farmers’ earnings tend to be measures against In the face of this enormous social chal- Apart from all the other arguments tion Group (CLEG) under the Association higher because they can harvest more. child labor lenge, can companies make a meaningful against child labor, it robs children of of Seed Industry, which in particular Child labor virtually eliminated Bayer itself draws positive results from contribution at all? almost all educational opportunities and used communication strategies in an the closer and more efficient collabora- thus a range of possibilities to determine effort to persuade farmers to dispense A dedicated team within Bayer was tion with the farmers. However, the Bayer in India has now been focus- their own lives. Yet implementing the with child labor in the future. Bayer formed to put this comprehensive pro- highest benefit lies in the fact that the What are the details of the Bayer ing on this question for more than ban was easier said than done. What also developed initial strategies to create gram into practice, which has since company helps combat child labor and CropScience Child Care Program? 10 years. In 2002, the company’s ag- evolved out of a steep learning curve economic incentives, with farmers receiv- proven a great success. The latest fig- is thus living up to its own values and The following measures have been ricultural business unit, Bayer Crop- was probably one of the most compre- ing bonuses for complying with the ban. ures from December 2012 show how the expectations of society and investors implemented so far: Science, acquired an Indian company hensive sustainability projects in Bayer’s many people the program has reached – in India and worldwide. that was active in seeds. In areas such 150-year history: the Bayer CropScience Yet because no significant progress was to date: In 2006, an average of around 1. Contractual ban on child labor as the states of Andhra Pradesh and Child Care Program. made with the CLEG program, Bayer 0.6 children per acre were still being With this program, Bayer is the first Karnataka – where child labor is par- decided to proceed alone in taking action employed on the fields of suppliers – a company to have achieved a lasting im- 2. Regular visits to areas under ticularly widespread – contract farmers But let us start at the beginning: Soon against child labor. It became increas- figure that was, however, already well pact in tackling child labor in India – a cultivation to check ages were growing cotton seeds on behalf of after the local Indian seed company ingly clear that more comprehensive below usual practice among Indian cot- commitment that was highlighted for the newly acquired company. Bayer – Proagro had been taken over by Bayer as approaches with a longer-term impact ton seed companies. In the 2012/2013 instance in the 9th Human Rights Report 3. “Learning for Life” education one of the first companies to become a part of the larger international acquisi- were necessary to bring about a real main season, only 21 isolated cases were of the German Federal Government. See- opportunities participant of the UN Global Compact – tion of Aventis CropScience, a potential change in mentality in village communi- noted on the 3,898 acres in total man- ing the Child Care Program succeed was had long attached great importance to child labor issue at Proagro was raised ties. Thus the Bayer CropScience Child aged by suppliers. Sanctions were applied a priority for Bayer CropScience, and the 4. Raising awareness of the respecting ethical principles, including by nongovernmental organizations. And Care Program was launched in 2007. The against these immediately. The number Executive Committee has actively sup- problem in the supply chain. In line with one of our Indian seeds unit was subject to program extends far beyond abolishing of children as a proportion of the total ported it as a core sustainability program. the Ten Principles of Global Compact, critical scrutiny. Later, key institutional child labor. Besides a contractual ban workforce thus went down dramatically We are convinced that, with such an 5. Incentives for farmers namely that businesses should uphold investors called for more information of child labor, it includes monitoring to 0.03 percent. initiative, we can make a key contribu-

80 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 81 Good Practice Human Rights

CCC Kazakhstan visits needy communities 60 Years of Contributing to provide food packages and clothing. Co mpany o rs to the Communities Co ntract

By Tony Awad, Consolidated Contractors Company o lidated

Sixty years of continuous giving that is rooted in the beliefs and values of the founders is Co ns what distinguishes CCC and makes it unique among other companies. Even before the term Clothing Donation Campaign “corporate social responsibility” became quite popular in recent years, the CCC founders in Greece put giving and care for the communities, employees, and their families as some of their core values, which they have been practicing throughout the history of the company. Their continuous giving to their communities, employees, and their families has left its mark on the thousands of people who have felt their support throughout the years. Their compassion In Greece: In Egypt: In Jordan: and philanthropic deeds may have grown out of the hardships they experienced in their It was 36 years ago that CCC moved the CCC Egypt has provided continuous help CCC Jordan provides regular financial early years; however, becoming one of the most affluent companies in the world had just managing offices of the Group to Athens, to the local communities in Egypt by and in-kind contributions and donations multiplied these humanitarian acts. Greece. Over the years, the management donating food packages containing basic to various charities and NGOs, organizes and employees have become closely con- necessities such as rice, sugar, oil, flour, blood donation campaigns, and is a main nected to the local communities. In con- salt, and dried vegetables to affected supporter of the King Hussein Cancer tinuation of the CSR initiatives, the CSR communities – mainly daily laborers Foundation. CSR is an integral part of the serve the societies and the countries in CCC’s CSR policy is guided by the com- Committee in Athens has continued to and their families. These food drives are CCC corporate vision which CCC has an operational presence. pany’s strong and ethical family values extend a supporting arm to communi- periodically repeated to cater to the needs and traditions. They are an integral part ties that have been badly affected by the of various NGOs, charities, and institu- CCC’s corporate social responsibility of its Corporate Vision, which ensures prevailing financial crisis in Greece. The tions that fall below the poverty level. initiative undertakes the role of “corpo- that its business values and behavior NGOs, charities, and institutions that Blood donation campaigns are regularly rate citizenship” to ensure that business are aligned with its Mission Statement; have benefitted from these campaigns organized to support local hospitals. values and behavior are aligned. They Company Core Values, Guiding Princi- included Medecins Du Monde / Doctors should be balanced between improving ples, and Code of Practice; Health, Safety, of the World; SOS Children’s Village; vari- In Kazakhstan: and developing the company’s business and Environment Procedures; and Hu- ous municipalities; retirement homes; as well as improving the quality of life of man Resources Procedures. orphanages; kitchens offering meals CCC Kazakhstan has set up a program its workforce, their families, local com- for homeless persons; facilities offer- whereby visits are made to different or- munities, and societies at large. CCC’s CSR contributions to the ing shelter for refugees and homeless phanages, retirement homes, and needy communities individuals and families; schools; clinics; communities to provide food packages, CCC’s CSR initiative and various other needy causes. clothing, and entertainment for the el- Over the years, CCC has participated and derly and orphans on a monthly basis and CCC’s corporate social responsibility contributed generously to the countries The contributions and sponsorships have during national and religious holidays. philosophy originated from the founders’ and communities in which CCC has consisted of providing specific necessities, strong belief that the company has an operated and passed through. CCC has including – but not limited to – food In Turkmenistan: Above: CCC Turkmenistan periodically obligation toward its shareholders, em- engraved its humanitarian and philan- stuffs; medicines and medical equipment; contributes food packages and clothing to ployees, clients, partners, subcontractors, thropic footprints in support of social clothing and blankets; kitchen equip- CCC Turkmenistan periodically con- support the local communities. and society. CCC does not exist merely development, health, and education ment; blood donation campaigns; PCs tributes food packages and clothing to to make a profit, but rather to improve through contributions that have come in and various materials. Generous contribu- retirement homes, orphanages, and in- Left side: Blood donation campaigns the livelihoods of the more than 120,000 the form of monetary donations and in- tions have also been made to the Greek stitutions to help support the needs of are regularly organized to support local families of its employees, as well as to kind participation. A few examples are: Association of Women with Breast Cancer. the local communities. hospitals in Egypt.

82 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 83 Good Practice Human Rights rance u Building Awareness and ns I

elta Going the Extra Mile: D

G reen Human Rights in Focus

1. All are equal before the law and are 12. All human beings are born free and emphasize women’s rights and women’s entitled – without any discrimina- equal in dignity and rights. They are empowerment as well as other related is- By Green Delta Insurance Marches With Time tion – to equal protection of the law. endowed with reason and conscience sues. Green Delta has already offered its 2. Everyone is entitled to all the rights and should act toward one another sponsorship to the Bangladesh Women and freedoms set forth in this declara- in a spirit of brotherhood. Chamber of Commerce and Industries for As the foremost non-life insurance brand of Bangladesh, The management as well as the Corporate tion, without distinction of any kind, some of their upcoming projects. Green Delta Insurance has many responsibilities to fulfill Affairs and Communications department such as race, color, sex, language, Keeping all 12 articles in mind, a photo sensed the need for showcasing elements religion, political, or other opinions; shoot was organized. The creative agency The current state of Human Rights in when it comes to CSR. Participating in activities for the of Human Rights through innovative national or social origins; property; arranged sets for all 12 visuals for 12 pages Bangladesh is a much talked about topic betterment of our environment, Human Rights, culture, means to create awareness among the birth; or other status. of the calendar. It was undoubtedly a these days, from both national and in- sports, and society in general has been a prominently visible people. The idea was to do something 3. Everyone has the right to freely and difficult but fascinating task to come up ternational points of view. Bangladeshi creative that would trigger people’s inner peacefully assemble and associate. with “state of the art” outputs, since the security forces are constantly being criti- trait of the company. The history concerning CSR at Green conscience. The biggest challenge was 4. No one shall be held in slavery or concept of shadow puppetry is still new cized by Amnesty International and Hu- Delta Insurance goes back years – to a time before CSR to deliver the messages clearly without servitude; and the slave trade shall in Bangladesh and using this in a calendar man Rights Watch. The abuse of children became the catch-all concept it is today. showing violent images, but to also show be prohibited in all its forms. was something no one in Bangladesh had and women is alarmingly high and on appropriate visuals as well. The GDIC team, 5. No one shall be subjected to torture done before. When the final version ap- the rise, as are attacks on minority com- with the help of its creative agency, came or to cruel, inhuman, or degrading peared, we were happy with the results. munities. With support from a number up with the idea to use “shadow puppetry” treatment or punishment. of political parties, terrorists are commit- to portray elements of Human Rights in 6. Everyone has the right to life, liberty, People from all walks of life responded ting heinous acts in the name of religion. a metaphoric manner. This idea was set and security. positively. Especially the clients, large Negative elements always seem to be The Ten Principles set by UN Global Com- time that GDIC has contributed toward to debut in 2013. Shadow puppetry, or 7. Everyone has the right to a nationality. corporate entities, NGOs, and humani- on an upward trend and prominently pact have always been given importance. the improvement of Human Rights in “shadow play,” is an old form of storytelling 8. Men and women of full age, without tarian organizations fully appreciated highlighted, whereas positive actions In previous years, Green Delta Insur- Bangladesh. Some of the initiatives led used usually for entertainment purposes. any limitations due to race, national- the concept and initiative and expressed largely go unnoticed. Green Delta Insur- ance Company (GDIC) has emphasized by GDIC in the previous years have been It creates the impression of moving objects ity, or religion, have the right to marry their whole-hearted gratitude. After the ance plans to stick with positive actions environmental issues, labor rights, and the rehabilitation of the freedom fighters or three-dimensional human figures. We and to found a family of their own. success of this project, GDIC decided to while making people aware of Human safety issues through its communication and women oppressed during the inde- wanted to tell a story about the shadowy 9. Everyone has the right to own per- run CSR-based campaigns regarding Hu- Rights through their communication tools. Many issues regarding Human pendence war; wheelchair distribution parts of our society, where values and sonal property as well as in associa- man Rights in 2013. The calendar was tools. The awareness-building programs Rights have also been dealt with. For for the war-wounded freedom fighters; rights are neglected and often violated. tion with others. an awareness-building project, whereas and CSR of Green Delta go beyond the 2013, GDIC took the initiative to focus support for the family of a slain police 10. Everyone has the right to freedom of future projects are aimed at bringing idea of doing better business in the fu- primarily on Human Rights, with an constable; and sponsorship of a chil- Out of the many articles on Human thought, conscience, and religion. direct and positive changes to the lives ture – rather, they highlight the need eye on the rising concerns surrounding dren’s day program to nurture hidden Rights set by the UN, 12 were chosen for 11. Everyone has the right to freedom of the victims. Some activation plans are to build a better society for our future this sector – although it is not the first talents among the little ones. 12 months of the year. They were: of opinion and expression. already in the pipeline. These projects will generations.

84 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 85 Good Practice Human Rights m o edc

M Mundial del Barrio

By Lilinés Urriola Herrera, Medcom

In 1997, after his social reinstatement, community leader Because of this league, there was a move- Hector Brands decided to start a summer soccer league in the ment started that became well respected by civil society. Today, Movimiento Nueva small town of San Felipe. The league comprised four teams Generación – MNG (New Generation with 70 kids from that area. The purpose of the league was to Movement) is a nongovernmental or- try to occupy the participants’ spare time during the summer ganization that handles the project called neighborhood of El Chorrillo, which be- to transmit the games nationally. This across the country: 5,834 beneficiaries Neighborhood World Cup in its entirety. came famous after being almost wiped served as an important motivator for in 2012 and 6,900 in 2013. and to keep them from violence and the use of drugs present The main objective of this project is to out by the tragic bombings of the United the kids to stay in the league, which in that area of the city. It was through soccer that the children develop activities under an overall scope States during Operation Just Cause in has strict rules, specifically regarding As in many other countries, soccer is and young adults started learning about peaceful coexistence, of prevention that are geared toward 1989 before being reconstructed by discipline and attendance. the most popular sport in Panama and children and adolescents living in socially subsequent administrations after the attracts a great number of fans. Because tolerance, and the benefits of living without violence. vulnerable and violent environments. It Manuel Noriega dictatorship. In 2007 The Neighborhood World Cup is the of its influence on the people, Panama’s also highlights moral and ethical values, Hector Brands presented the project to only league in the country that is free national team and professional soccer including the International Children’s the UNICEF Panama director at that time, for all the participants. In 2011 there club players have become role models Rights Law, and contributes to society who agreed to be a sponsor for three con- were 5,070 boys and girls participat- for the children, primarily in low-income with the education of future community secutive years, calling it then “UNICEF ing, from which 3,000 were granted communities. In the 16 years since the leaders for a peaceful culture. Cup.” That same year, more neighbor- scholarships by the Institute for the project’s inception, some of the pro- hoods were included, such as Santa Ana Education and Use of Human Resources, gram’s graduates have become players In 2013, there were 49,060 crimes and and Curundu, which are still socially a government agency. on the national teams in the professional misdemeanors of all types that were vulnerable places. In 2009 the “UNICEF leagues. This project has become the larg- reported in Panama for the year 2012, Cup” had around 3,000 participants. In Aligned with Medcom’s corporate social est soccer school in the country – not according to the National Integrated 2010 Medcom engaged with UNICEF responsibility strategy, this project ad- only because of the teaching of soccer, System of Criminal Statistics, which to create a bigger inter-neighborhood heres to the principles included in the but also because of the education as a belongs to the Office of Public Security. league, expanding it to other provinces, Declaration of the Rights of the Child whole, and the hope is that it will be Furthermore, other studies presented by changing its name to what it is now, regarding the areas of health, the use sustained for many more years. this office have shown a direct correla- Neighborhood World Cup, and bringing of spare time, and protection – it is tion between delinquency and popula- it to the national level, with participation all linked to the sporting activities, in- The soccer school’s primary objective tion density, which means there is more by 4,500 kids in its first season. struction of values, and the prevention has always been to prevent violence and crime in urban areas such as San Felipe, of drugs and violence. Currently, and to provide its participants with a better which is a small municipality adjacent to As Medcom became the main organ- ever since UNICEF assumed the pro- future, both personally and socially. Each the metropolis that Panama City has now izer along with MNG, the project has ject, the Neighborhood World Cup has game that is broadcast also features an become. There are many communities been featured on national television linked football with the teaching and individual case that takes into considera- similar to San Felipe in which kids are by station RPCTV, which broadcasts practice of values. It trains team direc- tion the outstanding participation of one more likely to follow a violent pattern news and sports. Medcom is a multi- tors and the children on topics such player. The case is chosen by evaluating of living due to population densities and media corporation composed of five as leadership, self-esteem, children’s all the team players, not only their social poverty levels. television networks (two broadcasted rights, family values, drugs and vio- backgrounds and outstanding sporting nationally and three broadcasted by lence, communication, and teamwork. skills, but also their personal develop- For more than 10 years, the soccer league, cable), two radio stations as well as the In 2011 there were a total of 576 hours ment regarding values and economic previously called Summer Cup, kept most important internet platform in of formal training, with 15-minute needs. In recognition of the efforts of expanding in San Felipe as an inter- Panama: telemetro.com. The alliance of preparatory lessons before each game. the chosen player, a sponsor is selected neighborhood league. It was installed both entities allowed for the inclusion For the last two years, the project has and offers a financial contribution for two years after its creation in the popular of new sponsors, which made possible had record-breaking participation all the player and his or her family.

86 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 87 Good Practice Human Rights

and the training to use it. Data produced rdisk Changing the lives of The Changing Diabetes® in Children in this way is an invaluable source of information about the state of diabetes o No o program has six components: v in these countries and how it is being

No controlled. It will contribute to an im- 10,000 children 6. Insights and outcome gained through the proved understanding of the practical program will be shared to the benefit 1. Improvement of existing infrastructure extent of the problem and ensure that of the development of healthcare systems and supply of equipment to individual children are given access to in developing countries. establish clinics for the treatment of children desperately-needed treatment through- with type 1 diabetes. out the course of their illness.

5. Creation of diabe- tes patient registry An important milestone reached and collection of data for patient The goal set for the Changing Diabe- follow-up. tes® in Children program was to enroll By Scott Dille and Camilla Crone Jensen, Novo Nordisk 10,000 children by the end of 2014. As 2. Training of March 2013, reports from the nine of healthcare countries revealed that the total number Living with type 1 diabetes is challenging – even more so for children in developing countries, professionals of children receiving treatment and care and diabetes had passed 10,000 – a little more than where having diabetes puts their lives at even greater risk. educators in diagnosing and a year ahead of time. treating children with type 1 diabetes. Today 10,119 children have been en- 4. Development of rolled and a total of 77 clinics have been diabetes education established to treat and care for children 3. Provision of free insulin Persons with type 1 diabetes must adhere Diabetes in children of common acute medical conditions en- material for children and families, with type 1 diabetes. Education efforts adapted to local settings. and blood glucose monitoring to daily injections of insulin to replace countered in many developing countries, equipment and supplies for children have resulted in 2,700 trained healthcare the insulin that their pancreas is unable Type 1 diabetes is a lifelong disease that such as cerebral malaria. enrolled in the program. professionals who are better equipped to to produce. Self-discipline – including often occurs at a young age, and its preva- diagnose and treat children with type 1 sticking to a balanced diet and monitor- lence is rapidly increasing in children For the family, having a child diagnosed diabetes and to provide education and ing blood glucose levels – is essential and adolescents in many countries. The with diabetes can bring an overwhelming support to their families. to preventing dangerously high or low International Diabetes Federation esti- financial and emotional burden. The cost blood sugar levels. On top of all this, mates that there are 490,000 children of necessary treatment and care often education materials must be made avail- country, a number of satellite access The Changing Diabetes® in Children persons with type 1 diabetes need to under the age of 15 years with type 1 exceeds a family’s annual income. In able to the children and their families. points have been set up to offer diabetes program supports the rights of children make sure they get regular exercise. diabetes in the world. Around half of some cases children are abandoned by monitoring and treatment. The whole with type 1 diabetes and their families them live in developing countries. the family as they are forced to make the The Changing Diabetes in Children® hub-and-spoke system is coordinated at to access the facilities and medical care For a child with type 1 diabetes, parents difficult choice between feeding their program a central point in each country. that provides health and well-being. and healthcare professionals are essential In the developing world, there is a high other children and using the income Through the program, Novo Nordisk to support their health and well-being. mortality rate for those with childhood on treatment. For the Changing Diabetes® in Children Children in the program receive free aims to strengthen efforts to achieve But in many parts of the developing diabetes. In sub-Saharan Africa, the life program, Novo Nordisk works with na- insulin, glucometers, and strips – a Millennium Development Goal 4 by world, this support is hard to come by. expectancy for a child with newly diag- Unfortunately, lack of awareness and tional and international partners to service that continues for the duration doing its part to reduce child mortality. nosed type 1 diabetes is typically less the cost of treatment are not the only provide immediate relief for children of the program. As the world leader in diabetes care, Novo than one year. barriers. Great distances and insufficient with type 1 diabetes and their families. Ensuring the long-term Nordisk saw a need to leverage its compe- travel options in rural areas make it dif- Looking beyond immediate relief, the The program gives major support to sustainability of the program tences and responsibility to take action. Barriers to proper care for children ficult for families to seek medical care. program builds lasting and long-term both the diabetes clinics and the satel- In 2009, the company launched the in developing countries Medical facilities, when reached, are support through the establishment of lite access points. Both are provided The current Changing Diabetes® in Chil- Changing Diabetes® in Children program short of medical equipment, supplies, clinics and training of healthcare pro- with medical equipment – including dren program is expected to proceed to improve the lives of children with type Diagnosing type 1 diabetes is the first and cold-chain storage for insulin. fessionals. glucometers and strips – as well as until the end of 2014. Novo Nordisk is 1 diabetes in developing countries. In crucial step. But in the developing world, storage facilities for medical supplies, currently working on a sustainability March 2013, the program surpassed its healthcare professionals are lacking To bring down the barriers, healthcare Since 2009, diabetes clinics have been with the support to set them up cor- plan for the program, in consultation 2015 goal of enrolling 10,000 children. awareness about the symptoms that can professionals require better knowledge established in nine countries: Bangla- rectly. The clinics are given appropriate with all involved partners, to identify Today, thousands of children are receiv- lead to neglected cases or misdiagnosis. about diagnosing and treating diabetes desh, Cameroon, Democratic Republic registry systems – developed by Novo ways to ensure the continuation of the ing the support and treatment they need In many cases, the symptoms of type 1 in children, care facilities must be acces- of Congo, Ethiopia, Guinea, India, Kenya, Nordisk for recording blood glucose provision of diabetes care for children to live normal, healthy lives. diabetes in children resemble symptoms sible and well supplied, and insulin and Tanzania, and Uganda. Within each (HbA1c) and other monitoring data – on a country-by-country basis.

88 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 89 Good Practice Human Rights

In 2004 a program was launched within ticipants. Since 2005, the partners have first-aid training seminars to help in the nergy the company aimed at raising awareness implemented several major projects. The response to injuries and heart attacks. E Road Safety – about the driving culture while creating key to their success in these efforts has Each year more than 70 medics take part safe conditions for the transportation of been the comprehensive support given in these training seminars. Moreover, people and cargo. The program includes by all the participants of the partnership. 135 first-aid kits were granted to the akhalin Fundamental Right daily road-safety monitoring, vehicle com- Road Traffic Safety Inspection office S pliance control, close engagement with • The goal of the long-term and large- for placement in police cars. contractors and subcontractors, Defensive scale seatbelt promotional campaign • On a contest basis six Sakhalin schools and Everybody’s Driving Training, use of the In-Vehicle called “Choose Life – Buckle Up!” is to received modern equipment for tutorial Monitoring System, among other things. enhance the awareness of drivers and road safety classes. Significantly, under passengers in regards to the benefits the terms of the contest, the schools Responsibility However, road traffic is a “multi-player of seatbelts. In different years and at will implement special road safety pro- game.” The success of a program that different stages, it has included dif- grams for children and parents as part is only focused on an isolated group of ferent components and has thus been of their normal educational activities, participants – for example employees – continuously expanded. Since 2012 this as well as organize road safety events By Natalia Gonchar, Sakhalin Energy will always be limited. An important ob- project has become part of a complex for other schools. jective of the Sakhalin Energy road safety educational and informational area of • “Be Bright! Be seen!” is a promotional program is to spread high standards for activities. The project is an open contest project encouraging Sakhalin young We drive and bike, walk, and even run trying to catch the The world community acknowledges corporate road safety beyond the company for the development and implementa- people to wear light-reflecting stickers rhythm of modern life. For most of us, traffic has become danger and its complexity. At the recent and its contractors. This is implemented tion of the best promotional campaign on their clothing. The main characters Rio+20 UN Conference on Sustainable via the Sakhalin Road Safety Partnership, for the use of restraints (seatbelts and of all the promotion materials and an integral part of our everyday routines. We take it for Development, a clear link was made initiated by the company back in 2005. children booster chairs). Symbolically, events are break dancers of the group granted and do not consider the road to be a source of between road safety and sustainable Sakhalin Energy employees and their very popular among the Sakhalin teen- constant danger – until suddenly a car accident happens development. It is of critical importance The first step toward the creation of a family members participate in promo- agers and youth. that all stakeholders accept responsibility partnership program aimed at improving tion campaigns as volunteers. • Over the years different events were and we are forced to reconsider … and think. Each year for road safety – state responsibility to the situation on the roads of Sakhalin • The project “A Safe Road to School” arranged under The World Day of Re- nearly 1.24 million people die as a result of road traffic protect its citizens, individual responsi- was the workshop arranged by Sakhalin started in 2006 due to problems concern- membrance for Road Traffic Victims. accidents. It means that more than 3,300 are killed on the bility of all road traffic participants, and Energy in March 2005. It was supported ing school students’ safety on Sakhalin corporate responsibility of business to by the Sakhalin Oblast Government and roads. The goals of the project were The main accomplishment of the partner- road every day. protect its employees and to contribute the Global Road Safety Partnership, with to reduce the injury rate of children ship has been a decrease in car accidents to sustainable development of society the participation of more than 60 repre- involved in car accidents; to unite the ef- and injuries. These figures are dropping where it operates in. Cross-sector co- sentatives from 25 government organiza- forts of the road police officers, teachers, slowly but steadily. According to the operation and, in a best-case scenario, tions and businesses. and parents; and to increase road-safety Road Traffic Safety Inspection office of partnership are essential. awareness in the area. Under this project, the Sakhalin Oblast, when compared to In June 2005, the Sakhalin government, the schools of the Sakhalin Oblast re- the figures for 2011, the number of car The participants of the Sakhalin Road the Ministry of Internal Affairs, as well ceived visual aids and “safe school route” accidents in the region in 2012 declined Safety Council believe partnership helps as businesses and the public joined to- maps indicating dangerous sections of by 3.3 percent; the number of deaths to maximize existing resources and trans- gether to sign the Agreement on Sakhalin the streets and roads. All the materials decreased by 2.4 percent; and the num- fers joint efforts into long-term, efficient Road Safety Partnership. This officially were developed after having taken local ber of people injured in car accidents programs. The basis of such optimism is confirmed their intention to work to- habits into consideration. This gave the dropped by 0.1 percent. the fact that the partners have been work- gether toward the improvement of road students an opportunity to study traffic ing together for more than eight years and safety in the Sakhalin Oblast. In 2011 regulations using practical examples, The UN General Assembly proclaimed their initiatives have yielded good results. the partnership was transformed into and to provide insights on their actual the period 2011 - 2020 as the Decade of The Sakhalin Road Safety Council unites the Sakhalin Road Safety Council, the daily routes. Action for Road Safety. The Secretary- representatives of the Sakhalin Oblast primary function of which is to build • The international experience shows General called on States, civil society, government, the local Ministry of Internal a platform for cooperation among the that first aid provided right on the spot business and communities to ensure that Affairs and Road Traffic Safety Inspection, stakeholders and thereby create a favora- plays the main role in rescuing human it will lead to real improvements. The the public, and – representing the busi- ble environment for the development life and preserving health. This is the Universal Declaration of Human Rights ness sector – Sakhalin Energy. and implementation of social projects. reason why training programs should guarantees everyone the fundamental The projects should help to decrease the work to improve the awareness and right to life, liberty and security of person. Safety is one of the key priorities for the number of injuries and deaths from car first-aid skills of road police officers and Should road safety be recognized as a company. During all the years of its ac- accidents as well as the overall number nurses. First aid is a priority method, part of it? To answer this is unalienable tivities, Sakhalin Energy has been imple- of accidents, and encourage a culture of as it helps to reduce the occurrence of right and responsibility of all members menting programs targeted at road safety. safe road behavior for all road traffic par- death and injury. The Council supported of the human family.

90 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 91 Good Practice Human Rights SK their businesses. To provide effective The Global and substantive support for these so- cial entrepreneurs, the SE Hub takes an action-oriented approach by encouraging collaboration and inviting participants Social Enterprise to post current sustainable development projects. The SE Hub seeks to support a range of functions such as progress moni- Action Hub toring. The platform is intended to be robust and will evolve to include a report- ing element that will allow participants to assess the progress and performance of projects posted on the SE Hub. By the Social Enterprise Team, SK SUPEX Council The SE Hub will also create an online community of social entrepreneurs and investors by providing networking and information-sharing channels in addi- As social and environmental issues change and become more complex, a new approach is tion to matchmaking services. Through required beyond the existing efforts of governments, NGOs, and corporations to tackle global information and communication tech- challenges. In this regard, social enterprises are becoming significant players in bolstering nology, all experiments in supporting and managing social enterprise will global sustainability and addressing social challenges in innovative and sustainable ways. continuously evolve in order to build a With the objectives of creating both economic and social value, social enterprises adopt more robust platform. managerial efficiency and market mechanisms in their social operations to offer more Inspiring other business customized and efficient solutions that deliver larger and more sustainable impacts. contributions to the UN Development Agenda

The growing complexity and scale of For social enterprises to grow, support IT experiences to the underprivileged to Reflecting the increasing interest of the members of the steering committee, key investment, joint venture, product devel- social problems requires the solutions to from – and cooperation among – dif- help support their employment opportu- UN in enhancing its partnerships with organizations including Abraaj Capital, opment, incubation, and procurement op- be collaborative rather than independent. ferent players is necessary. Large corpora- nities. Happy ICT is working to narrow the private sector, the UN Global Com- Intel, World Resources Institute, UN portunities. This participation is expected Reflecting this trend, the Global Compact tions can play an especially important the information gap between different pact and SK came together to launch Principles of Responsible Investment (UN- to help further drive the development of is developing the UN Global Compact role in supporting social enterprises socioeconomic classes and to build a an online platform to connect social PRI), and New Ventures-Brazil will also social enterprises, impact investing fields, Partnership Portal to encourage coopera- through their state-of-the-art technolo- social safety net in the telecommunica- enterprises with corporations and other play an active role in deciding policies and boost public interest in social enter- tion among UN entities, corporations, gies, financial firepower, and global net- tion sector. SK has also transformed one stakeholders such as impact investors. and developing strategies of the SE Hub. prises and inclusive economies. and other organizations in support of works. Recognizing social enterprises of its subsidiaries, Happy Narae – a the UN Development Agenda. The SE can be a vehicle to effectively deal with maintenance, repair, and operations At the Rio+20 Corporate Sustainability An online platform to connect social To address a range of UN priorities in Hub will be integrated into the portal. fundamental problems. company – into a social enterprise. As a Forum in June 2012, which was hosted enterprises with stakeholders relation to the Millennium Development social enterprise that supports other so- by the Global Compact, SK announced Goals and the Post-2015 Development As one of the components of the UN SK’s effort to build an ecosystem for cial enterprises, Happy Narae purchases a collaborative project with the Global The SE Hub is an online platform to con- Agenda, the SE Hub aims to balance Global Compact Partnership Portal, the social enterprises products of other social enterprises, thus Compact called The Global Social Enter- nect social entrepreneurs, corporations, its activities across emerging markets, SE Hub will contribute toward fulfill- providing a healthier and broader sales prise Action Hub (SE Hub), an online plat- impact investors, NGOs, policymakers, underdeveloped countries, and OECD ing the Millennium Development Goals SK has been focusing on creating a vi- channel. To find and nurture prospective form for social enterprises and impact and other stakeholders. The SE Hub aims member countries. through facilitating an action-oriented brant and robust ecosystem that supports social entrepreneurs, SK also launched investors. The SE Hub collaboration was to catalyze partnerships among these approach. The Hub is expected to provide social enterprises. SK has tested various a website called “Sesang,” a collabora- also reiterated at the World Economic groups to co-create and scale the most Action-oriented approach through new strategies and ideas in effectively ideas by establishing new social enter- tion network that brings together the Forum in January 2013, and it is being promising solutions to global develop- on- and offline assistance to social implementing the Global Compact’s Ten prises and supporting existing ones in expertise of diverse sectors such as social pushed ahead as one of the Global Com- ment challenges and to advance the UN enterprises Principles and will spur more business Korea. SK is endeavoring to leverage its enterprises, governments, and NGOs. pact LEAD priority projects. The Global Post-2015 Development Agenda. participations in other Global Compact core competencies in supporting social Through the website, SK is consolidat- Compact and SK plan to unveil the beta In spite of innovative ideas and commit- issue platforms, including Caring for enterprises to maximize their impacts. ing the foundation to support social version of the Hub at the 2013 Global The SE Hub will facilitate various col- ments to solve social problems, many Climate, CEO Water Mandate, Women’s SK established Happy ICT, a social en- enterprises through information services, Compact Leaders Summit and to launch laborations between social enterprises and social entrepreneurs confront difficulties Empowerment Principles, and Children’s terprise that offers IT training and field communication, and research. the final version by the end of 2014. As other participants in the areas of strategic in successfully launching and managing Rights and Business Principles.

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T Diarrhea is one of the diseases targeted Saving Lives Around the Zinc is fundamental for human health in Ethiopia’s National Child Survival Strategy, which the ZACH project will support. The project aims to make the It is crucial for growth and brain development and helps fight dangerous infec- management of childhood diarrhea a World with Zinc key part of Ethiopia’s efforts to reduce tions, especially in children. Sadly, zinc deficiency affects 2 billion people world- wide and contributes to the death of nearly 450,000 children under five each child mortality. year. It costs less than $ 0.50 for a 10 - 14 day course of zinc treatment and oral rehydration salts to treat acute diarrhea, and ultimately save a child’s life. Zinc ZACH expands with a new By Kathleen Reid, Teck treatment has been recognized as a cost-effective solution for treating acute diar- partnership in India rhea by the international community, including the World Health Organization and Copenhagen Consensus. In April 2013, Teck announced a new The Zinc Alliance for Child Health (ZACH) brings together ZACH aims to make the management of partnership with UNICEF Canada to help Canadian organizations committed to accelerating the use of childhood diarrhea a key part of reduc- As Canada’s largest diversified resource company and one of the world’s largest save the lives of children in India. Nearly ing child mortality. ZACH works with all producers of zinc, Teck recognizes the role we can play in finding solutions to the one-quarter of all worldwide deaths of zinc and ORS around the world to treat diarrhea, one of the levels of government to help ensure the global issue of zinc deficiency. We believe in strategic community investments children under the age of five occur in leading killers of children. More infants die from diarrhea- availability of supplies and treatment that make a difference and are related to our core business. Our Zinc & Health India. Many of these children die from a related illnesses associated with zinc deficiency than from that is affordable for families, communi- programs are active in communities where zinc deficiency is a major issue. In preventable cause – diarrhea. Currently, ties, and the wider health system. 2011, Teck launched the Zinc & Health program to raise awareness and contribute less than 2 percent of children with diar- HIV/AIDS, malaria, and measles combined. to short- and long-term solutions to zinc deficiency worldwide. Our involvement rhea are treated with zinc and ORS – a Zinc Alliance for Child Health with the UN Global Compact has fostered the partnerships needed with multilat- proven and effective form of treatment. reaches communities in Africa eral organizations, businesses, NGOs, and governments to advance Zinc & Health. Through our Zinc & Health program, we are proud to be working toward the Teck and UNICEF Canada’s partnership The first partnership under ZACH was health-related UN Millennium Development Goals. will improve child health in these states formed between Canadian partners the of India – Uttar Pradesh, Odisha, and Micronutrient Initiative, the Government Madhya Pradesh – by improving access of Canada, and Teck in 2011. to and use of zinc and ORS as therapeutic treatments for diarrhea. The partnership ZACH’s first project was launched in The numbers cannot be ignored. Each and ORS. ZACH will work with all levels aims to save the lives of approximately Senegal in May 2012 in support of that year, more than 1 million children under of government to help ensure the avail- 150,000 children from 2013 - 2017, and country’s Ministry of Health plan to the age of five die from complications ability of supplies and treatment that 50,000 lives annually by improving cov- dramatically scale-up zinc treatments for associated with diarrhea. is affordable for families, communities, erage of effective diarrhea treatment children aged six months to five years. and the wider health system. and strengthening healthcare systems The project aims to treat more than Burkina Faso: Aim to treat 7 million in three regions in India. 2 million cases of diarrhea in Senegalese cases of diarrhea by 2015 Ethiopia: Aim to treat 6.5 million children under the age of five over the cases of diarrhea by 2015 A simple solution to a global next three years. Zinc and ORS treatment Sadly, nearly one in five children born in problem is being delivered by healthcare workers Burkina Faso does not see his or her fifth The project in Ethiopia is focused on at 4,000 health facilities across Senegal. birthday. The project in Burkina Faso will increasing awareness of diarrhea as a Since being launched in 2011, Teck’s Zinc scale-up the use of zinc supplementa- serious childhood illness, as well as in- & Health program has made significant To date, the project has supplied 39,000 tion and oral rehydration salts to treat creasing awareness that zinc and ORS progress in improving distribution chan- zinc treatments to health facilities and childhood diarrhea across the country. are the treatment of choice. nels, raising awareness, and educating treated more than 8,000 cases of diar- The project will aim to treat more than others about the devastating effects of rhea with zinc and ORS. As a result of 7 million cases of diarrhea in children Currently, just over a third of children zinc deficiency. The program focuses on ongoing advocacy and consultation by under the age of five over the next three with diarrhea who are taken for treat- short- and long-term solutions organ- ZACH, zinc and ORS are now provided years and train healthcare workers and ment at a health post or clinic in that ized around five pillars: Therapeutic free of charge in public health facilities caregivers on the proper treatment of country receive oral rehydration salts, Zinc, Zinc Supplementation, Advocacy by the Ministry of Health in Senegal. diarrhea with zinc and ORS. and zinc treatment is close to zero. Yet, and Awareness, Food Fortification, and This is significantly improving access providing both forms of treatment not Crop Nutrition. to treatment for the country’s poorest Project components include increas- only helps children recover from diar- populations. In February 2013, ZACH ing knowledge and awareness so that rhea faster, but can help save their lives. A young girl in the village of N’Gomene Keur Atou in the Thies region of Senegal waves launched two major projects in Burkina more caregivers, health practitioners, The ZACH Ethiopia project is expected to To learn more about Teck’s Zinc & Health a Canadian flag. The Thies region was the first in the country to scale-up zinc and oral Faso and Ethiopia that will save more and community members recognize the treat 6.5 million episodes of diarrhea in program, visit www.zincsaveslives.com rehydration salts (ORS) to treat diarrhea. young lives. importance of treating diarrhea with zinc children under the age of five by 2015. or follow @ZincSavesLives on Twitter.

94 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 95 Good Practice Human Rights p ou r Philanthropy As an the TMS G Integral Part of CSR

By Jeffrey Revels, The TMS Group

Corporate social responsibility (CSR) encompasses many different components across a myriad of industries in both the public and private sectors. One of the most demonstrative

aspects of CSR involves philanthropy, which not only includes a commitment of monetary artistic fashion line of cashmere scarves. tating tsunami that struck throughout family’s ability to educate one or all support, but a personal involvement in volunteerism, too. These much-cherished values This process not only generated aware- Southeast Asia nearly a decade ago. The of their children. Direct financial sup- represent the cornerstone of our year in 2012 and future CSR endeavors. ness about the plight of the Haitian Sacred Heart School and surrounding port, school uniforms, and computer people, it ultimately gave the children community were decimated. equipment are all part of the continual a voice and a creative outlet for their provisions provided by the TMS Group messages of survival, hope, and deter- Through collaborative efforts with the for the Sacred Heart School. mination for a better future. TMS Group for fundraising and volun- The key concerning CSR – for business Group embodies the following three Haiti: “I am Haiti” project teerism, the school was rebuilt and has The positive outcomes here translate and community partners – is to take the key traits: The TMS Group collaborated closely with grown into a thriving institution. into increasing numbers of children in initiative to consistently identify and seize The Franca Art and Fashion charity the charity regarding the production, this community who now have access opportunities to elevate the well-being (A) Protection: First and foremost uphold- was founded by TMS Group CEO, Frank sales, and distribution processes. One The school is divided into primary and to free education. Upon completion of of humanity. It further implies that our ing human rights and the respect of Fleischer, and his wife, Caroline. This hundred percent of the net proceeds secondary levels. Nearly 40 percent of high school, greater opportunities are policies and practices must be ethical and dignity for all. charitable organization has a mission generated by Franca Art and Fashion the enrollment is at the primary level, opening for matriculation to universities transparent at all levels of operations. As (B) Community Service: Strengthen and to promote the global-wide education, go to building a sustainable community with student ages ranging from 6 to 11 or trade and vocational training schools. an enterprise, we must be accountable in build the community ties and social health, and welfare of disadvantaged and a brighter future for the children of years old. Sixty percent are enrolled in Furthermore, those children who take our daily work as well as to our custom- involvement of our suppliers. children. the Maranatha School and Orphanage, the combined secondary / high school advantage of the newly created pathway ers, employees, and the communities we (C) Inspiring: Develop new and existing which is located in the capital city of levels for students aged 12 - 17 years old. out of poverty are becoming positive operate within. Hence, the obligation to methods to advance underprivileged In 2012, the charity was a key contributor Port Au Prince. An intermediate level / wing is being family and community role models. pass on these philosophies and actions people’s socioeconomic status with and sponsor of the “I am Haiti” project. planned for ages 12 - 14 in 2014. to our supply base is a fundamental and an emphasis on access to education This project utilizes art created by chil- Through dedication and tireless com- Year 2012 synopsis ethical business requirement. and healthcare. dren, who are victims of long-standing mitment, the school’s staff cares for 160 Annually, the school’s student registra- poverty and were devastated by the 7.0 children in a region whereby poverty tion continues to grow through word of The TMS Group has a long history of The TMS Group strategy for social compli- Solely addressing operational CSR issues magnitude earthquake that struck Haiti remains pervasive. In the United Na- mouth within the adjacent communities. philanthropy and it will continue to be a ance and CSR is a holistic approach that within the confines of global supply in 2010. The children’s artwork, which tions Human Development Index, Haiti At the end of calendar year 2012, the significant hallmark of the TMS Group’s utilizes the combined framework and chains does not complete a true CSR was exhibited in several charitable art as a nation ranks 145th of 169 countries, student population was 424. Based on corporate citizenship and CSR philoso- participation within the United Nations profile. A significant degree of social re- shows, was then transformed into an which is the lowest ranking in the West- the current growth rate, the school is ex- phies. This includes not only offering Global Compact and the Business Social sponsibility and compliance is inher- ern hemisphere. pected to double within the next three to financial support coupled with compas- Compliance Initiative to create partner- ently manifested within the concept of five years. Families continue to relocate sion, but emphasizing the creation of ships aligned with clear and measurable corporate philanthropy. “Giving back” to India: School rebuilding and to the coastal fishing region in order for opportunities for socioeconomic mobility global standards that are addressed in a the communities in which our global op- sponsorship their children to enroll in the school’s through individual and corporate deeds. proactive way with suppliers. This pro- erations reside – and to those in need – well-structured curriculum. gressive strategy toward implementing also represents the “true heart and com- The TMS Group has been a long-term All of these efforts are done with the ethical corporate business processes is mitment” of the corporate citizen. sponsor and primary contributor to the The basic education provisions through- expressed understanding that education part of an overall CSR philosophy that rebuilding of the Sacred Heart Primary out India are free. However, critical re- – combined with social development – embodies philanthropy as a key element. Consistent with the core values of cor- and High School located in the Para- quirements must be provided by families offers the best hope. It is the key to porate citizenship, the TMS Group con- mankeni Kanchipuram coastal district such as: school uniforms, course materi- breaking the vicious cycle of poverty Philanthropy and CSR are indeed mutu- ceives, promotes, and sponsors interna- of the Chennai region of India. The als, notebooks, and meals. The costs for that pervades developing nations and ally inclusive. Philanthropy for the TMS tionally-based philanthropic endeavors: sponsorship dates back to the devas- these essentials oftentimes will limit a disadvantaged families.

96 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 97 Good Practice Labour Standards p ou

r clients, and now also associates, to take part in joint sporting activities to collect o G o The Future of Work: kilometers and raise funds for organiza- tions that have a clear focus on giving decc young people a future in work and life. A Superhumans Included In 2012 and 2013, we asked elite athletes to champion the Win4Youth project. The Godfather of the 2012 program was Bel- gian disabled triathlete and role model, The British broadcaster of the 2012 Paralympic Games invited viewers to “meet the super­ Marc Herremans. In 2013, supporting humans.” More than an advertising phrase to highlight Paralympians’ sporting ability, our Win4Youth efforts is medal-winning Paralympian, Wheelchair Tennis player, it also opened minds to the unique talents and potentials of people with disabilities – and “One of Us,” Florence Gravellier. or rather, with different abilities. As the world’s leading provider of HR services, we are Since 2010 she has been leading the Dis- passion­ate about this ethos. Adecco helped recruit the people to work at the most inclusive Adecco Group CEO Patrick De Maeseneire ability and Skills Programme for Adecco during his presentation at the France. As a role model for the power and Olympic and Paralympic Games ever. IPC Academy Inclusion Summit in London. potential of inclusion, Gravellier says: “People do not define me as a former athlete or Paralympian anymore. I have become part of the mainstream work- force. This is what inclusion is all about, By Lilian Furrer, Adecco Group a continuous legacy. We must drop the Multifaceted action for inclusion being accepted and playing a part.” word disabled and make ability and ac- cessibility the main topics.” As a Steering Committee Member of With around 32,000 employees assisting LOCOG to manage 218,000 applications worked to deliver and overachieve on Adecco Group CEO, Patrick De Mae­ the ILO Global Business and Disability 700,000 associates on a daily basis, we and hire 8,300 people to work directly the key elements of the government’s seneire, highlighted both the economic Network, our activities aimed at the embrace our responsibility to uphold for LOGOC, being the people behind the diversity targets is widely recognized as and social case for a diverse workforce, inclusion of disabled people are multi- the UN Global Compact Principle 6: “The Games. Thanks to our Diversity Tracking ground-breaking.” stating that the inclusion of people with faceted. Through working with disability elimination of discrimination in respect Software, we knew that 10 percent of the different backgrounds and abilities into organizations and government employ- of employment and occupation.” In 2012, registered workforce had some kind of The IPC Academy Inclusion Summit the working world is high on Adecco’s ment services, we helped more than our activities in this field intensified as disability, which was way beyond our 6 agenda: “Inclusion because we need it; 50,000 disabled people integrate into we helped recruit the people to work at percent target from LOGOC. To support one of the goals of the Para- inclusion because we want it.” He drew the labor market between 2007 and 2012. the Olympic and Paralympic Games. Our A Guaranteed Interview Scheme lympic Games, which is to promote inclu- attention to a growing scarcity of work- In 2012 the IPC and Adecco ex- approach is about doing a wide range of and the Disability Talent Pool were vi- sion in our wider society, Adecco joined ers and skills that makes inclusiveness tended their relationship to deliver the ordinary things for extraordinary people, tal for this achievement. The Guaran- forces with the International Paralympic essential and highlighted a study by the IPC Athlete Career Programme for the for the good of the economy and soci- teed Interview Scheme meant that if a Committee (IPC) to organize the IPC Centre for Strategy & Evaluation Services, next eight years. The cooperation began ety. “Better work, better life” applies to disabled candidate’s curriculum vitae Academy Inclusion Summit, which took which showed that more than 60 percent in 2007 by helping Paralympians with everyone and the future of work means demonstrated that he or she had the place between September 6 and 8, 2012, of companies with diversity policies career guidance and employment to “superhumans included.” required skills and experience for the in London. Speakers included Organising reported that it strengthened cultural val- sustain an income while competing for a role applied for, Adecco guaranteed them Committee of the Olympic and Para- ues, enhanced corporate reputations, and successful transition into the workforce. London 2012 – The most inclusive an interview and the opportunity to lympic Games (OCOG) representatives, helped them attract and retain highly So far, the Programme has been adopted Games display their skills. The Disabled Talent companies such as Adecco and British talented people. More than 50 percent of by 15 National Paralympic Committees, Pool was created by Adecco and used by Airways, as well as Paralympic athletes companies stated that diversity contrib- with another 5 to 10 countries join- As the official recruitment services LOCOG’s Diversity and Inclusion Team. sharing their view on what the benefits uted toward improved innovation and ing in 2013. Dervis Konwalp, a British provider to the London Olympic and It gave disabled people who initially of inclusive and accessible societies are by creativity among employees, enhanced Paralympian swimmer and multiple Paralympic Games, Adecco UK & Ireland missed out on a position the possibility exemplifying the Paralympic Games as service levels and customer satisfaction, medalist, states: “The Programme allows helped the London Organising Com- to be considered for other opportuni- a catalyst for societal change. Attendees and helped overcome labor shortages. De us to see our own skills and realize the mittee of the Olympic Games (LOCOG) ties. Adrian Cross, COO Hyphen, Adecco included more than 100 people from Maeseneire concluded: “As the leader in traceability from our sporting careers realize their vision to create the most Group UK & Ireland says, “Our diversity around the world representing govern- inclusive workforce, it is our responsi- to our working careers.” inclusive Games ever. Lord Sebastian deliverables demonstrate what can be ments, disabled people’s organizations, bility to create opportunities and offer At Adecco we strongly believe in Coe, Chair of LOCOG, says, “Inclusion is achieved when the right stakeholder businesses, and the International Labour solutions for individual development. It the power of sport to engage and unite about removing barriers to making peo- cooperation – supported by robust sys- Organization. In his opening speech, IPC not only enhances social harmony but people behind a common cause. Each Win4Youth Godmother 2013 Florence ple participate at every level.” Embrac- tems and processes – are implemented. President, Sir Philip Craven, set the stage has tangible economic value at a time year, our Win4Youth program galvanizes Gravellier during the Beijing Olympic ing this philosophy, we partnered with The fact that Adecco and LOCOG jointly with a clear message: “London 2012 is when the skills shortage is growing.” thousands of Adecco Group colleagues, Games in 2008.

98 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 99 Good Practice Labour Standards

sch Bo Occupational Safety Bosch principle occupational health and safety on occupational 2007 2008 2009 2010 2011 2012 health and safety Occupational accidents 3,000 3,012 Management – A Systematic management 2,000 2,687 2,128 1,913 2,012 1,000 1,818 - 33.2 % *

0 Approach to Achieving Days lost 30,000 39,311 Safety in the workplace and the 36,250 28,037 physical well-being of our as- 20,000 24,672 27,082 26,016 10,000 - 33.8 % * sociates has top priority. National Success 0 standards for a safe and hygienic Headcount work environment are complied 300,000 281,717 283,507 302,519 305,877 with strictly, thus ensuring health 200,000 271,265 270,687

By Bernhard Schwager, Bosch and safety in the workplace and 100,000 + 12.8 % * a healthy work environment. 0 * Percentage relates 2012 to the base year 2007 Occupational health and safety management for associates is one of a company’s key processes. This applies primarily for humanitarian reasons but is also true from an economic perspective. Occupational accidents, illnesses, and diseases are costly for companies and society. Today, practitioners at all of the approximately regular safety instruction for associates 13 percent between 2007 and 2012 and is technical safety aspects combine with the requirements of ergonomics, user-friendly organiza- 300 manufacturing and development on safety-conscious practices. Up-to-date now about 300,000. Lost days have also tion of work, and health protection to form a system-oriented approach to occupational safety. locations around the world are working information, guidelines, checklists, and declined. In 2007, these amounted to to achieve this goal and are committed instruction materials for occupational 39,311 days, whereas the figure for 2012 to reaching the targets at all regional and safety and health promotion are supplied was only 26,016, representing a decrease local levels. Quarterly reports on goal for these purposes. Operating instruc- of around 34 percent. Efficiently organized occupational safety achievement are sent from these loca- tions are also an important prevention is becoming an increasingly important tions to the respective divisions and to tool. All this ensures that our associates Continuous improvement process competitive factor. Productivity and corporate headquarters, which provides worldwide are informed about risks and quality depend crucially on the health support for any measures and campaigns protective measures in the workplace. Continuous efforts are needed to main- and motivation of the workforce. Oper- required at the locations. Our internation- tain these types of reductions on a sus- ating processes can only run smoothly al EHS Steering Committee (Environment, Positive assessment tainable basis. Bosch works with special- if practical consideration is given to Health, and Safety) comprises 15 regional ists in internal and external working health and safety protection. Effective coordinators and manages the worldwide Since 2007, Bosch has been implementing groups and committees to develop and occupational safety management sys- implementation of our strategic goals and an occupational safety management sys- improve standards and implements im- tems promise the greatest benefit in standards. This includes the optimization tem at all its manufacturing and develop- provement initiatives systematically. We this respect. In the Bosch Group, we of production processes. ment locations, thus making it one of the actively involve associate representa- have therefore integrated occupational forerunners worldwide in implementing tives and communicate good practice health and safety management into our Internal requirements and standards the Occupational Health and Safety Advi- solutions to all locations to achieve a management processes and introduced sory Services 18001 standard. The results continuous improvement process. One an occupational safety management measure success. It is also possible to Safety engineer Carsten Pipper at robot Binding standards exist for the Bosch have been positive, as this has created a of the main functions here is to detect system that complies with internation- agree upon new targets and monitor acceptance inspection: “We scrutinize Group that lay down minimum require- global uniform structure for occupational potential accident and health risks for ally recognized standards. We conduct these. every machine and workplace, analyze ments for occupational health and safety health and safety and has therefore simpli- associates in order to take appropriate systematic risk-analyses, detect potential risks across the board, and define pro­ management. Systematic risk assess- fied it. Total numbers for accidents and preventive measures in good time. The accident and health risks very early, The Bosch Group occupational tective measures.” ments are used at the locations to identify lost days have decreased significantly, con- safety specialists offer the locations com- and thus prevent occupational illnesses safety target risks for workplaces and activities before firming that the safety measures taken are prehensive advice on all issues relating and diseases. If the hazard sources are necessary protective measures are de- having a positive effect. The accident rate to plant, process, and operational safety, known, appropriate preventive meas- We have enshrined the prevention of rived from these for plant and machinery fell by approximately 40 percent – from whether it involves handling individual ures can be introduced and associates occupational accidents, illnesses, and and for handling hazardous substances, 6.9 in 2007 to 4.2 in 2012; the number safety issues, practical solutions for pro- can be given targeted protection. As diseases in our principles for work safety accidents. It is looking to achieve a rate for example. Bosch provides managers of occupational accidents decreased ac- cess engineering systems, or support incidents such as accidents and loss of and environmental protection throughout of three reportable accidents per mil- with training on their duties and re- cordingly – from 3,012 in 2007 to 2,012 for systematic safety assessments. The work are documented, the documenta- the world. The Bosch Group has set long- lion hours worked by 2020. Managers, sponsibilities in occupational health and in 2012. At the same time, the number specialists also provide support on im- tion can be used to compare figures and term targets for reducing the number of safety specialists, and occupational health safety management such as carrying out of associates increased by approximately plementing legal obligations.

100 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 101 Good Practice Labour Standards p ou r WHEN WOMEN DO BETTER, G wer

o anp ECONOMIES TO DO BETTER M

Few companies have helped empower women like ManpowerGroup – both inside and out- side our organization. As the world leader in innovative workforce solutions for 65 years, ManpowerGroup was one of the first employers to bring women into the workforce decades ago and remains a pioneer for women today. We not only provide experience and employ- ment opportunities to women that they previously may not have had access to, but equally important, we nurture a culture that respects how diversity of thought inspires the productiv- ity, innovation, and collaboration companies need in the Human Age – an era of certain uncertainty requiring flexibility and new approaches to work.

Seven female electricians with a • In France, an energy company was faced ManpowerGroup was also named a 2020 ManpowerGroup France employee. with a serious lack of skilled electri- Women on Boards Winning Company ManpowerGroup helped source, train, cians. To fill these positions, Manpower for its commitment to board diversity – and recruit the women to tackle an France developed a custom solution to 30 percent of ManpowerGroup’s board By Mara Swan, ManpowerGroup energy company’s talent shortages. help source, train, and recruit women of directors are female. I am proud to for the roles, which have traditionally work for an organization that values been filled by men. The program is now diversity of thought, experience, and Every March, the world celebrates In- Women account for 70 percent of global inclusive workforce because they recog- being introduced nationwide. perspectives regardless of gender. ternational Women’s Day to honor the consumer spending, which means that nize there is no substitute for diversity of • In Hong Kong, a nationwide staffing economic, political, and social achieve- when we do better, economies do better. thought and perspective. The issue now is anywhere, meaning that women who are initiative recruits unemployed or un- Today’s era of certain uncertainty de- ments of women. While much progress Women also make up half of the global this – what companies are offering is not the sole caretakers of their children and derskilled women found through NGOs mands new ways of working, sharing, has been made – for example, I am talent pool, yet they are being underlever- what women want. The barriers placed cannot be in an office or workplace at and nonprofits to fill a large number of and collaborating that makes old models writing this piece the day after the pass- aged at a time when businesses across the in front of working women are social, certain times of the day have the option support positions working in hard-to-fill unsustainable. This means companies ing of Margaret Thatcher, a woman who globe cannot find the talent they need to cultural, and structural, and there needs of flexible hours and telecommuting. roles at more than 60 public libraries. should address their leadership models, certainly made her mark on the world drive future growth – ManpowerGroup’s to be a shift toward contemporary work • Our operations in Mexico and Cen- people-practices, and talent sources, and as the first female prime minister of the 2013 survey shows 35 percent of employ- models that better provide them with the Across the world, ManpowerGroup is tral America have taken steps to help revise their internal systems, culture, United Kingdom – many barriers still ers report talent shortages. This situation flexibility they seek so that the percentage committed to providing training, expe- women with disabilities find work, in- engagement, and training practices to exist. Women are still grossly underrepre- is not sustainable. of women in the workforce does not drop rience, and employment opportunities cluding sponsoring those with visual create new, flexible work models so that sented both in the workforce as a whole off with every sorting of talent. to help women unleash their potential impairment so they can train as mas- high-performing women can contribute and, particularly, in leadership positions. Accelerating demographic shifts in many anywhere at any time. sage therapists, as well as providing and unleash their full potential. countries, particularly developed markets, There also needs to be greater focus on scholarships to assist 129 women in According to the International Labor are shrinking traditional talent pools. strategic ways to reintegrate women who • Manpower in Australia has launched completing high school. At a time of acute talent shortages, mak- Organization, nearly half of working As world economic growth continues to temporarily leave the workforce to raise several recent initiatives to increase the ing a workplace more flexible and at- age women are not currently active in shift south and east, emerging markets a family. Skills lifecycles are now so short proportion of women in the Australian Inside our own organization, women tractive to women can give companies a the formal global economy. Grant Thorn- have plenty of people, but not necessarily that being out of the workforce for a pe- Defense Force, resulting in more women account for more than 70 percent of significant advantage over competitors. ton’s 2012 International Business Report the required qualified talent. In a world riod of time makes it extremely difficult applying for a diverse number of roles in ManpowerGroup’s managers globally. I am proud to recognize International revealed that barely one in five senior where uncertainty is the one certainty, to return because skills have atrophied the military. Manpower Defense Force For the fifth consecutive year in 2013, Women’s Day but look forward to a time management positions globally are held diversity of thought is required to remain in the interim. This requires flexible Recruiting centers around the country ManpowerGroup was named one of when the world no longer needs such a by women. Among Fortune 500 compa- agile and adaptable in the face of an work models and people practices so have been developing Women in Army America’s Top Corporations by the day because our societies have achieved nies, only 15.7 percent of board seats are unpredictable business environment. that women are not forced to choose information sessions, including guest Women’s Business Enterprise National equality in the workforce and have un- held by women. The issue of women in between a career and children. Evolv- speakers. One recruit, who is also a Council in recognition of the company leashed the potential of all people. the workforce is not about fairness or The modern issue of women in work is ing technology makes flexible working single parent, provided excellent insight instituting programs offering equal ac- merely achieving gender parity, it is a not necessarily one of deliberate exclu- feasible, where it was simply not possible to those in attendance on how the army cess to women-owned businesses and Mara Swan is ManpowerGroup Executive Vice critical economic issue. sion; companies on the whole desire an in the past – now we can work from has supported her and her family. world-class supplier diversity. President, Global Strategy and Talent.

102 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 103 Good Practice Labour Standards rs u factors that may be caused by the seepage make fur garments for their collections. Providing Quality of animal waste. The use of underuti- When these situations arise, Saga Furs lized sea species for making feed is one is in a position to recommend trusted saga f factor that helps balance the ecology. dressing companies and manufactur- The fishing of feed species reconditions ers whose transparent policies toward and Transparency water systems by significantly reducing employees, the environment, and social volumes of phosphorus and nitrogen responsibility match those of Saga Furs. in the Baltic to deter eutrophication. for consumers Another practical measure is the use of Day-to-day routines often lead to ideas newly developed technology that allows linked to sustainability. The Design Cen- precise feeding of individual animals, tre is working with a dressing company thereby reducing their waste. that has achieved preliminary success By Charles Ferro, Saga Furs in developing alternative, “green” tech- Above: Saga Furs label not only for the Openness and action from farm to niques for dressing furs. The dresser beauty of the fur, but also the promise fashion and Saga Furs have engaged several re- Transparency may not be the first thing that comes to mind when a fashionista gasps in awe of transparency contained in the brand. searchers in a project aimed at finding at a stunning fur creation on a Paris, New York, London, or Milan runway, but transparency As an auction house, Saga Furs holds a eco-friendly, plant-based alternatives to Left: Saga Furs Design Centre offers pivotal position between the sources of replace chemicals in dressing processes. is a central value in consumer consciousness. As a fur auction house, Saga Furs promotes in- a prime example of how the company its product and the fashion industry. In novative transparency: upstream at farms where the company sources only quality European- promotes responsible use of fur its essence, fur is a natural, sustainable As it looks toward tomorrow, Saga Furs produced pelts, and downstream among partners in creative phases resulting in fashion. without compromising creativity. product, but the company takes extra is in the process of expanding the values steps to guide auction buyers and their of transparency, both internally and manufacturing customers toward sustain- through its sphere of influence among able, transparent processes. Saga Furs De- partners. Years ago, the company had sign Centre offers a prime example of how freely chosen to do so in a global com- “Even before sustainability and trans- In the 2012 - 2013 auction season, all the company promotes responsible use munity that now leaves us with no other parency became household terms, Finnraccoon pelts sold by Saga Furs came of fur without compromising creativity. responsible choice. Saga Furs had become the fur industry from certified farms. The company aims pioneer in providing openness along for the same objective for fox pelts in “The Design Centre is a steward of Euro- production chains,” says Director of the following season. Efforts to extend pean craftsmanship and innovation in Communications / CSR Päivi Mononen- Farm Certification have progressed to the the realm of fur. In addition to being the Mikkilä. “This applies to coopera- point where well over 90 percent of fox world’s think-tank for developing new SAGA FURS IN BRIEF tion with partners within Saga Furs’ production in Finland and 60 percent of applications for the material, it is also sphere of influence as well as processes mink breeding takes place on certified a training ground for a new generation over which the company has direct farms. In addition, the system has been of furriers, designers, and consumers,” control. That we were the first in the exported to other European countries says Head of Product Development Per Saga Furs is the world’s only trade to create CSR policy and to join where the company sources pelts. Reinkilde. publicly-listed fur auction house. the UN Global Compact is also note- The company sells Saga Furs® worthy.” Saga Furs, via ProFur, also works closely The majority of designers are there to find Mink, Fox, and Finnraccoon at with Finnish and international agencies inspiration while learning the basics of the four annual auctions to buyers A garment bearing the Saga Furs® label to reduce the impact of fur farming on craft and refining their skills. Reinkilde from around the world. It was on fashion runways carries the values the environment. Studies show the carbon notes that visitors are also briefed on the first company of its kind to of transparency demanded by consum- footprint of a mink or fox pelt used for sustainable processes that should be em- have a CSR policy and to join ers. The Saga Traceability System allows clothing is rather small when compared ployed when creating fur designs. Con- the UN Global Compact. every pelt sold at auction to be traced transparency. The traceability of the Farm Certification System goes to the carbon footprint of other habitual sumers who visit learn about the four Saga Furs Design Centre is the back to the farm of origin. All Saga Furs entire production chain, the fact that beyond what is required consumption items. The company intends sustainability principles of fur: use, store R&D department, where new pelts come from European farms and important stakeholders can assess it as to reduce the footprint even further, with properly, renew, and recycle. Since doors applications for fur are innovated. are barcoded at the source to allow iden- objectively as possible, and the gradual Saga Furs has supported – and played an one means being the introduction of to the Design Centre opened in 1988, more To help designers – and ultimately tification along the production chain. inclusion of fur farm certification in active role in – the Finnish Fur Breeders’ sustainable energy sources to farms. than 30,000 persons have visited. auction customers – the Design the Saga Furs quality criteria are the Association’s (ProFur) Farm Certification Centre hosts seminars, where In phases between an auction – dress- company’s most important tools for System, launched in 2005. The program As a member of the Baltic Sea Action The company may also act as match- visitors learn furrier techniques ing, logistics, manufacture – Saga increasing its own control over the raises fur-farming standards above those Group, Saga Furs helps reduce acidifica- maker, as many clothing companies and and find the expertise needed to Furs helps partners find services from products it sells. Quality criteria begin recommended by the EU and has proven tion and nutrient emissions that cause designers who visit the Design Centre realize their creative ambitions. companies that share our concerns for on a fur farm. to be a major success. eutrophication in bodies of water – two do not have the equipment needed to

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ecutive Officer, Dr. Peter Köhler. In his Ingenieure), there are currently 98,000 is part of this, as is a productive work at- Young and Old: opinion, it is not only immoral to count vacant jobs for engineers in Germany, mosphere,” states Ober. This is influenced colleagues over the age of 50 as past and the need for engineers in the future positively by an appreciative manage- eidmüller their prime, but faced with demographic will be even greater. Investing in educa- ment culture and pleasant colleagues, W change, it is also unwise from a corporate tion is, for Weidmüller, sustainability in but also by additional fringe benefits The Best Connection perspective. Older colleagues have a huge action,” summarizes Köhler. such as individual training measures wealth of experience that they bring to and joint sporting and leisure activities. the daily work processes. Combined with With its diverse range of opportunities, the newest qualifications of the younger Weidmüller also makes every effort to Measures aimed at catering to the needs staff, this experience creates the perfect offer the right path for each candidate as of older staff are currently being devel- By Dominique Alhäuser, Weidmüller mix for a company that is dedicated to they begin their work life. The company oped. Opportunities tailored to older innovation and precision. has trained apprentices for more than staff should help maintain performance, 60 years, and every year it accompanies the ability to work, and –last but not Actively encouraging junior staff as well as the more experienced is sustainability in action Based in Detmold, the company has more than 200 apprentices and trainees least – the motivation of staff aged 57 for the family-owned company Weidmüller, and it is also a way to counteract the effects of maintained an academy of its own since worldwide as they begin their profes- and older, particularly in the years right 2003. “We have united international sional lives. Alongside the classic ap- before reaching the statutory retirement demographic change. activities for qualifying and building prenticeship for a total of 10 professions age. For example, older staff can reduce knowledge in our company and transfer- in the technical and commercial spheres, their work hours and enter into a part- ring that knowledge to and from external the dual course of studies and trainee time arrangement, with which they can institutions, universities, and partners program provide further attractive pos- alternate between five-day and four-day According to UN estimates, by 2050 the will have to be nurtured and maximized. Young or old? For Weidmüller, a family- under the umbrella of the Weidmüller sibilities for an ideal start in the chosen work weeks. From the age of 57, staff world population will total more than 9 bil- The SME family company Weidmüller, there- owned company, that is not an either-or Academy,” states Köhler. The academy profession. Three-month periods abroad members are also granted two extra lion, of which 22 percent will be over the age fore, demonstrates its commitment using a question. “We have to support our older has had an offshoot in Shanghai since in one of Weidmüller’s global branches days of “extraordinary holiday.” With of 60. This shift in our age structure needs structured and consistent approach, with its staff in helping them to stay healthy 2011. It is dedicated to ensuring, for ex- are an integral part of the training plan increasing age, the number of additional to be compensated for within the corporate very own academy for the managerial staff and in retaining their enjoyment at the ample, that the successful “dual course of the 18-month trainee program. Fur- holiday days rises as well and allows for environment. The ability and desire of older of tomorrow. At the same time, it offers a workplace and assisting the young ones of studies” model takes off in Asia. Ad- thermore, there are integrated “mentor- up to 36 days of extra holiday. Longer employees to work must be maintained, and special work-life balance program for its to find their way in life and realize their ditionally, the academy cooperates with ing programs”: Junior staff have direct periods of exemption are also possible: the full potential of the coming generations older employees. full potential,” explains the Chief Ex- well-known universities in Germany, access to managers who also help them For example, staff on part-time contracts Asia, and across the world – for in- with career planning. A direct exchange could work full-time for three months stance with the Centrum Industrial IT of ideas promotes a culture of dialogue and then take three months off. in Germany and the Shanghai Jiaotong within the company. University – to promote research. Additional measures are also offered “For today’s employees – whether start- for the health of older staff. General Weidmüller places particular emphasis ing work or already experienced – along- examinations by doctors as well as an- on being involved at an early stage by side salary, the whole package has to be nual eye and hearing tests and subsidies providing support for solid education and just right: A motivating company culture for hearing aids are part of the package. making the right choices – not simply Spouses and partners can be involved in when youngsters are starting their profes- the individual planning of special fitness sional lives. Every year, more than 3,000 programs: for instance, through a grant pupils all over the world experience their for a holiday in a convalescence clinic or first taste of a “corporate atmosphere” a joint cookery course for healthy eating. at Weidmüller. In 2011, the company was awarded the Hermann-Schmidt The innovative activities are not only prize for its professional orientation well-received by staff, they also help to program, which accompanies pupils counteract the impression that age is an on an ongoing basis starting in the 7th obstacle that needs to be overcome. In grade. “We harness the natural curios- fact, our program expresses our particu- ity and enthusiasm of teenagers to steer lar appreciation for older staff and their them toward topics such as mathemat- qualifications, which are hugely impor- ics, natural sciences, and technology in tant for the company. Köhler emphasizes: a playful way,” explains the Managing “The difference between a good and an Director Human Resources, Dr. Jürgen Dr. Peter Köhler, spokesperson of the board, outstanding company are the staff: the Ober. “According to the Association of believes in the encouragement of employees young and the experienced – together – German Engineers (Verein Deutscher as a crucial factor of success. in one team.”

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Environment

110 Audi 112 Camfil 114 Deutsche Post DHL 118 Deutsche Telekom 120 EDF Group 122 Grundfos 126 MTU Aero Engines 128 Sakhalin Energy

Anti-Corruption

130 Business Keeper 132 Thales

Environment Anti-Corruption

Principle 7: Businesses should support a precautionary Principle 9: encourage the development and diffusion of Principle 10: Businesses should work against corruption approach to environmental challenges; environmentally friendly technologies. in all its forms, including extortion and bribery.

Principle 8: undertake initiatives to promote greater environmental responsibility; and

108 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 109 Good Practice Environment di

Au isms that are just thousandths of a Audi Future Energies – millimeter in diameter. Just as plants do, these organisms carry out oxygenic photosynthesis. The experts at Joule have modified these microorganisms Balancing Business and such that they produce ethanol or long- chain alkanes – important components

of diesel fuel – directly from the CO2 Environmental Concerns and sunlight. The fuels are removed from the microorganisms, separated from the water, and cleaned. This tech- nology is the basis for Audi e-diesel and Sustainability is a guiding principle at AUDI AG. Audi e-ethanol. Sustainability helps us retain our competitive edge and In short, e-ethanol is a product with Audi uses another innovative process The German energy industry could also the same chemical properties as bioetha- economic efficiency as well as protect the environment to solve this problem. The hydrogen is benefit in the medium term from the nol. But e-ethanol is far better, as no

and ensure a decent future for generations to come. combined with CO2 in the methanation concept of the Audi e-gas project, as biomass is used in its production. This facility downstream of the electrolysis it provides an answer to the unsolved e-ethanol can be admixed with fossil fuel plant to produce synthetic renewable question of how to store green power gasoline (e. g., E 10) or, alternatively, can methane – Audi e-gas. From there, it efficiently and independently of location. be used as the basis for E 85 fuel (85 % By Dr. Peter F. Tropschuh and Elise Pham, Audi can then be fed into the natural gas The potential of electricity-gas cogenera- ethanol, 15 % gasoline). network and stored there. It can later tion to store large amounts of wind or In addition to developing Audi be tapped – anywhere, anytime. even solar energy can provide powerful e-ethanol, Audi is partnering with Joule

A primary objective concerns compre- energy. The accelerating expansion of in turn, will help solve a considerable The CO2 comes from waste gas emit- stimuli for the expansion of renewable to manufacture synthetic diesel fuel:

hensive CO2-neutral mobility. To this end, renewable energies means that energy problem associated with the sea change ted by a nearby biomethane plant oper- energies. Audi e-diesel. A considerable strength of Audi is looking far beyond emissions sources subject to fluctuations play an in energy: the storage of energy. ated by EWE, an energy provider. This Audi e-diesel will lie in its purity. from vehicle exhaust systems. Besides increasingly larger role. In short, there At the plant, renewable electricity biomethane plant runs on organic waste. Audi e-ethanol and Audi e-diesel In contrast to petroleum-based

the actual usage phase, the company is is sometimes a surplus of electricity and will be used to split water via electrolysis The Audi e-gas facility uses the CO2 as diesel – a mixture of a great many hy- also examining vehicle manufacturing at other times a shortage. With a rated into oxygen and hydrogen (Audi e-hydro- a raw material for new fuel. Audi e-gas These projects address an old problem drocarbon compounds – e-diesel is free and recycling processes as well as the input of around 6,000 kW, the plant gen), which will power the fuel-cell vehi- is thus a climate-neutral fuel – when in search of a solution. Whenever con- of sulfur and aromatics. This fuel of to- upstream fuel supply chain that is in- will primarily use electricity from wind cles of tomorrow. A widespread hydrogen combusted in the engine, exactly the ventional petroleum-based fuels are com- morrow will also offer excellent ignition

creasingly gaining in importance. power whenever there is oversupply. That, infrastructure does not yet exist, however. same amount of CO2 is released as was busted, they release CO2 and pollute the performance thanks to its high cetane Audi is the world’s first carmaker previously bound at the e-gas plant. atmosphere. Ethanol and diesel from number. And its chemical composition to become directly involved in the de- Depending on the supply of elec- renewable raw materials such as corn will permit unlimited blending with velopment and production of renewable tricity, the plant in Werlte is expected and rapeseed generally achieve a better fossil fuel diesel. fuels that do not rely on biomass. Audi to produce some 1,000 metric tons of environmental balance. Audi and Joule jointly built a is focusing on an entire range of drive Power Grid e-gas annually while chemically bind- But these fuel sources compete demonstration facility in Hobbs, New The wind energy is to fed technologies. Its fuels of tomorrow are Gas network into the public power grid. ing approximately 2,800 metric tons with arable land for growing food. As Mexico – a barren region with lots of Audi e-gas, Audi e-ethanol, Audi e-diesel, The e-gas is stored in the public of CO . These same 1,000 metric tons such, they cannot constitute a long-term sunshine. This facility opened in Sep- gas network and can therefore also 2 and Audi e-hydrogen. supply households and industry of Audi e-gas could power 1,500 Audi solution for our planet’s skyrocketing tember 2012. Audi e-ethanol was pro- with energy from renewable sources. A3 Sportback g-tron vehicles for 15,000 population. duced for the first time in transparent

Audi e-gas kilometers (9,320.57 miles) per year in The CO2-neutral mobility of to- plastic tubes in early 2013 and manu-

CO2-neutral driving. morrow necessitates radically differ- facture of Audi e-diesel is expected to Wind Energy The first step is the Audi e-gas project: CO CO2 tailpipe emissions for the Audi ent fuels. Audi is therefore collaborat- follow in the next few years. Efforts at The starting point for the 2 Audi is creating an entire chain of sustain- Audi e-gas project is renewably A3 g-tron are consequently less than 95 ing on just such a solution with the the demonstration facility alone illus- able fuels. As a joint project of Audi and generated electricity. grams per km (152.89 g / mile). When the American company Joule. In a patent- trate the clear superiority over conven- plant builder SolarFuel, the Audi e-gas Elektrolysis Audi A3 g-tron is powered by Audi e-gas, ed process, Joule manufactures fuels tional bioethanol. In line with forecasts, plant in the northern German town of The electrolysis plant. which is no more CO is released than was chemi- with the aid of special microorganisms the yield of Audi e-ethanol is some operated by wind power, splits Methanation 2 Werlte began operations in June 2013. It water into oxygen and hydrogen. The hydrogen reacts with carbon cally bound in its production beforehand, in a highly scalable modular system 20 times greater! In addition, regions dioxide in a methanation plant. is the world’s first industrial facility to use The result: e-gas (syntetic natural gas) creating a closed loop. Even when one (SolarConverter®): Audi e-diesel and Audi that are unsuitable for agriculture such

CO2 and renewable electricity to generate includes in a comprehensive analysis the e-ethanol. as deserts could be utilized for energy a synthetic substitute for methane. The CNG filling station energy required to build the e-gas facility This process requires either waste- production. Commercial production of The increasing proportion of plant will run on renewable electricity e-gas promotes climate-friendly long-distance mobility. and wind turbines, CO2 emissions are water or salt water; CO2; solar energy; the new fuels could begin within the generated via, for instance, wind or solar still only 20 grams per km (32.18 g / mile). and special single-celled microorgan- next five years.

110 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 111 Good Practice Environment

therefore contributes to CO2 emissions use the best available air-cleaning solu- Calculations with lifecycle cost software amfil C Buildings Need Effective related to power production. But ventila- tions. By aligning our business approach document this. Lifecycle thinking for tion should not be reduced just to save and practices to ensure the delivery of clean-air solutions helps customers energy, which may compromise IAQ. eco-efficient solutions, Camfil can help lower their operating costs, increase building owners meet emerging energy- their energy efficiency, and select the Air Filters performance requirements and comply right product for the best air quality In Europe, it is estimated that HVAC systems consume up to 30 - 40 percent of with building-certification schemes. and lowest total cost of ownership. The all energy needed to operate a building. software considers filter efficiency, filter Air filters that consume less energy, are Lifecycle costing of air filters life, filter change, labor, filter cost, dis- By Myriam Tryjefaczka, Camfil eco-efficient in design, and comply with posal costs, and allows for varied inputs industry guidelines and standards will From a long-term perspective, energy for all of these factors, plus the largest cut this consumption directly. A simple consumption is the major overall cost filter expense: energy usage. Air is free and necessary for life. The quality of air also has a direct impact on quality of life: measure such as installing quality filters component in an air filter’s overall life- The cleaner the air we breathe, the healthier we are, and the better we feel and perform. with the lowest average air resistance, cycle cost. Compared with most standard Economic impact of IAQ and the highest filtration efficiency, can filters on the market, Camfil’s products – Unfortunately, healthy air is becoming a scarce commodity, especially in the larger and more reduce the considerable power appetite thanks to their design and filter media – In the debate to trim the energy con- densely populated cities of the world. The most common air pollutants, such as airborne of HVAC systems. Quality filters last can reduce the operating cost of a venti- sumption of HVAC systems, Camfil ar- particulate matter (PM), ozone, and nitrogen oxides, are known to cause respiratory problems, longer, clean better, save more energy, lation system by more than 20 percent, gues that IAQ is a factor that cannot and do not have to be changed as often. since the system can operate more effi- be ignored because it may determine a heart diseases, and other illnesses. A recent study by the World Health Organization (WHO) This adds up to a lower total cost of ciently with our filters, which keep their building’s functionality and economics. suggests that long-term exposure to this air pollution can also affect brain development, ownership. Good filters provide clean pressure drop low over a longer time Without proper filtration and ventilation, reproductive health, circulation, and diabetes. air with economic benefits. Clean air and have higher filtration efficiencies substantial IAQ problems can be quite is good for the bottom line of business to remove more contaminants. Simply costly in terms of lost work time, lost and society at large. described, air-handling units need less use of buildings, expensive repairs, legal power to drive air through Camfil filters. costs, and bad publicity for the owner. Sustainable side of air filtration ventilation systems operating without effective filters, where it mixes with a Camfil offers a full portfolio of air filtra- cocktail of other indoor pollutants that tion products to protect people, manu- may be present, such as radon, tobacco facturing processes, and the environ- Sustainable air filtration smoke, volatile organic compounds, and ment. Over the years, we have focused biological pollutants. This is why our on driving the air filtration industry indoor air can actually be more seriously toward better standards for product polluted – up to 50 times more than performance and energy efficiency by By reducing the energy needs of ventilation systems, Camfil’s eco-designed outdoor pollution, involving greater helping to develop the EN 779:2012 air products can make more of a difference for conserving energy and support- health risks for the young, elderly, and filter standard, ratified in 2012, and ing global efforts to fight against climate change. chronically ill, especially in urban envi- contributing to the Eurovent product Camfil Group joined the UN Global Compact initiative in 2009 and reports ronments and in areas with heavy vehicle certification program for energy labe- annually in accordance with the Global Reporting Initiative. We offer sustain- traffic. With people spending up to 90 ling of air filters, formally launched in able clean-air solutions in the air filtration market and have won numerous percent of their lives indoors, we need 2012 (but introduced by Camfil for its awards for our low-energy filters in Europe and the United States. Design- to think just as much as about indoor products already in 2009). These develop- ing environmental aspects into air filters has been a priority for years. Our air quality (IAQ) as ambient air quality. ments are positively impacting the air products have the lowest energy consumption in all filter classes for air filter industry and highlight the need for conditioning and ventilation systems. Balancing ventilation and energy better ventilation systems that consume demands less power and make buildings greener. Converted into carbon dioxide emission data, air filtration becomes one of Europe is an example, where one-third because of exposure to air pollution, the easiest, cheapest and most available clean technologies to reduce the of the people living in cities are exposed according to WHO. Fortunately, govern- At the same time as we need cleaner air, Reducing the power consumption of energy consumption of building ventilation systems while improving IAQ. to excessive PM concentrations, and one ments are responding by reviewing and governments are focusing on the energy HVAC systems with energy-efficient fil- Fans in air-handling units need an average of 31.5 TWh of energy to move air out of six Europeans is said to suffer from strengthening air quality strategies based aspects of ventilation as a means to cut ters that also improve IAQ is a practical through filters. If the air filter maintenance market in Europe would convert a respiratory problem. Air pollution in on the latest knowledge and research. the energy consumption of buildings and way to reach two important goals: miti- to energy-efficient air filters, energy needs would be reduced by a minimum Europe is estimated to cause more than reduce greenhouse gas emissions. Clean- gating climate change and combating of 10 percent, which is equal to a minimum reduction of 190,000 metric tons 400,000 premature deaths annually. On But air pollution has a darker side: Pol- ing air from air pollution in heating, the health threats of indoor air pollu- of carbon dioxide, the amount emitted by some 610,000 vehicles. a worldwide basis, the figures are just as luted outdoor air penetrates the indoor ventilation, and air conditioning (HVAC) tion. The savings are true and tangible if www.camfil.com grim: Two million people die too early environment through open windows and systems requires substantial energy and customers make the right decisions and

112 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 113 Good Practice Environment

time, we acknowledge the responsibility Sustainability matters emissions calculations are based on our st DHL Delivering a Better of the logistics industry in mitigating fuel and electricity consumption data, the environmental impact of transport. By 2020, we intend to improve the carbon which is combined with operations data Moreover, with their unique position efficiency of our own transport services from the various divisions. This highly and expertise along the entire supply and those of our subcontractors by 30 accurate method of calculation earned tsche Po Tomorrow chain, logistics providers can help other percent compared with the base year Deutsche Post DHL the “Green Control- u e industry sectors make progress toward 2007 – improvements that, in turn, ling Award” in November 2011, which D a low-carbon economy. benefit our business customers’ envi- was conferred for the first time by the ronmental efforts. In fact, we are well Péter Horváth Foundation. Through its GoGreen program, Deutsche ahead of our interim target, having al-

By Katharina Tomoff and Dr. Jan Dietrich Müller, Deutsche Post DHL Post DHL is improving its own CO2 ef- ready achieved our 2012 mid-term goal We have taken this approach because ficiency, thereby making it a key driver of improving our own carbon efficiency we see environmentally friendly and for greener logistics solutions for its by 10 percent two years in advance, in efficient logistics as an opportunity to As one of the world’s largest logistics companies, Deutsche Post DHL has a special responsibility customers, many of whom have already 2010. Optimized transport routes, mod- create value – for the environment, for to society and the environment, which is why sustainability is so important to our business. introduced specific goals to reduce their ern aircraft, alternative drive vehicles, the company, for our customers, and for CO2 emissions. By combining innovative and energy-efficient warehouses are just our shareholders. At Deutsche Post DHL, In particular, we are taking concrete measures through our innovative environmental pro- technologies with more environmentally- some of the ways in which we are reduc- we believe that environmental protection

tection program, GoGreen. This is just one of the ways in which we are translating this com- friendly products and services, we are ing climate-damaging CO2 emissions. and business success are not just compat- mitment into action, as part of our efforts to be part of the solution for a better tomorrow. able to open up new markets and busi- ible – they are closely interlinked. Sus- ness opportunities for our customers, To measure our progress, we have in- tainability is becoming more and more of while helping them achieve their own tegrated carbon accounting into our a competitive advantage, as consumers

environmental goals. financial accounting system. The CO2 increasingly consider environmental

Because of its potentially devastating act. In a global survey of 3,600 business As the first logistics provider to offer impact on the environment, the economy, customers and consumers worldwide carbon-neutral shipping services for our and humanity, climate change is widely commissioned by Deutsche Post DHL, customers, and the first to publicly com- recognized as a critical problem requiring alongside its Towards Sustainable Logis- mit to a quantifiable carbon-efficiency Going electric Air fleet modernization urgent action. All parts of society – and tics study in 2010, climate change was goal, sustainability is part and parcel of not least, business – are becoming more identified as the most pressing challenge how Deutsche Post DHL does business. aware of the urgency and the need to facing the world today. It is this commitment to be a positive force in the societies in which we operate In 2011, DHL Express successfully switched to an The most significant share of Deutsche Post DHL’s

that motivates our partnership with the all-electric fleet of 30 vehicles to handle its deliveries direct CO2 emissions is generated by its air network. To United Nations and our steadfast adher- in downtown Manhattan, New York. This was part of help shrink this footprint, the company is continually ence to the UN Global Compact and its Deutsche Post DHL’s global electric-vehicle testing investing in newer, more efficient aircraft that not only Caring for Climate initiative. program of 131 electric vehicles in the United States burn less fuel, but also generate less noise. and Germany, to assess their usability in everyday Greener solutions operations. The company is also employing or testing hybrid, propane, and other alternative fuel vehicles, As a global logistics provider, Deutsche with some 1,500 vehicles in the Deutsche Post DHL Post DHL moves goods and information fleet powered by alternative methods. around the world for all types of busi- nesses in every sector of the economy, making it an important force in promot- ing economic prosperity. At the same

DHL employee delivering GoGreen items

114 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 115 Good Practice Environment

aspects in their purchasing decisions. The This in-depth look into imaginative fu- world in 2050, it takes a far-reaching Taking responsibility for tomorrow manner. By taking a proactive role in st DHL same applies to investors who consult Counting carbon ture scenarios reveals how, while we may look into the future of trade, business, seeking better alternatives and sparking a sustainability rankings when looking not be able to make precise predictions and society. In the words of Deutsche Post DHL CEO dialogue on more environmentally sound for viable investment options. in our interconnected world, thinking Frank Appel, “All of us must realize that business practices, Deutsche Post DHL is about the future can help us anticipate More than 40 well-known experts, includ- it is our responsibility today to set the upholding the spirit and Principles of tsche Po Preparing a sustainable future DHL Express in the United States and prepare for change. ing Klaus Töpfer – the former German direction for tomorrow and the day after the UN Global Compact to help deliver u e has launched two new carbon- environment minister and former direc- tomorrow.” a better world for tomorrow. D Using fuels and other natural resources reporting services for customers Visionary thinking tor of the UN Environment Programme – in a more sustainable way is critical, both looking to monitor and reduce helped develop the futuristic scenarios. Logistics have always moved the world for ensuring a better future and enabling their climate change impact. What types of trends and developments The study describes five far-reaching, and are doing so today in a much more the long-term success of Deutsche Post By expanding its GoGreen Carbon should we prepare for in the future? occasionally radical, versions of life in resource-efficient and sustainable man- Delivering responsibility DHL. This focus on the long-term and Estimate and GoGreen Carbon Could “green” growth help avoid the cli- 2050, and it is complemented by a series ner. Logistics companies are taking re- Deutsche Post DHL is committed to making a concern for a sustainable future is also Footprint carbon-reporting mate crash? Will mass consumption pre- of multifaceted essays contemplating sponsibility for their actions, while also positive contribution to society and the environ- the driving force behind our ground- services to the United States, vail everywhere? Will nations cooperate various aspects of the future (see the box helping their business customers operate ment. More about its corporate responsibility breaking series of publications called DHL Express is responding to the more closely, or will the world become for more on these). in a more environmentally responsible program: www.dp-dhl.com/en/responsibility.html Delivering Tomorrow. With this series, growing priority many businesses more fragmented and protectionist? Will the company is fostering a dialogue on are putting on being environmen- the drive toward ever-bigger economic Of course, in reality, the future will not key issues that will shape the world over tally responsible. efficiency be forsaken for more resilient conform to any one scenario, but may the coming decades. supply structures? And, what new tech- contain elements from all these hypoth- nologies will deliver the everyday goods eses. In this regard, the most impor- About Deutsche Post DHL The Delivering Tomorrow series was of tomorrow? tant common themes to emerge from launched in 2009 with an examination of among the scenarios are the broadly customer expectations in 2020. This Del- ity will transform the logistics industry, These are just some of the questions transformed role of logistics, along with phi study shed light on pertinent trends both in terms of its business model as explored in “Logistics 2050 – A Sce- a more prominent role of urban areas Deutsche Post DHL is the world’s leading mail and logistics services group. in the economy, technology, and society well as the range of advanced solutions nario Study.” Based on astute observa- and the importance of sustainability Some 475,000 employees in more than 220 countries and territories form up to the year 2020 and beyond. A year and technologies that will be used by tions from a large, multidisciplinary topics. In particular, the threat posed by a global network focused on service, quality, and sustainability. In 2012, later, we delved into another important logistics service providers going forward. range of prominent experts, the study climate change stands out, calling for a Deutsche Post DHL revenues exceeded € 55 billion. The Group operates a development of the future – the shift to outlines how the world and logistics responsible approach to the environment fleet of more than 80,000 vehicles – some 1,500 of which are powered by more sustainable logistics. The findings We then rounded out the series in 2012 could change in the next four decades. as a crucial consideration for shaping alternative methods – and around 250 dedicated aircraft. showed that the pursuit of sustainabil- with the logistics 2050 scenario study. In presenting alternative visions of the the future.

Future imperfect – Five scenarios for the world in 2050

Delivering tomorrow Scenario 1 shows a world that revolves around In Scenario 2, sustainable megacities emerge Scenario 3 describes a world where individual- Scenario 4 describes a less rosy world beset by And, in Scenario 5, accelerated climate change To learn more about future growth, unchecked materialism, and mass con- as the world’s power centers amidst a paradigm ization and personalized consumption are economic hardship, excessive nationalism, and results in repeated supply failures and the trends in logistics and to access sumption. This unsustainable way of life is fed shift to “green” growth, where institutions and pervasive, driven by 3-D printing, leading to a protectionism, leading to international conflicts need to create resilient, regionalized supply the studies in the Delivering by the relentless exploitation of resources, which companies collaborate to cater for urbanites rise in regional trade streams, with only raw over resource deposits. structures. The resilient world in 2050 relies on Tomorrow series, go to: stokes climate change and spurs escalating and create efficient logistics solutions – from materials and data still flowing globally. a logistics sector that ensures supply-security www.dp-dhl.com/en/logistics_around_us.html natural disasters, thus leading to supply chain underground cargo transport to a sophisticated as a top priority, with backup infrastructure to disruptions. high-tech infrastructure. guarantee reliable transport in unstable times.

116 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 117 Good Practice Environment m o elek

T Piloting the Future: tsche

u Environmentally-friendly e D Technologies

Innovations are the key to ensuring the future of our society. Whether smart grids, networked transportation, and mobility solutions or virtualization of products – information and com- munication technologies (ICT) offer a wide range of solutions. But in order for a new invention to make it, it has to go through stringent practical testing. In T-City Friedrichshafen, the world’s largest living lab, Deutsche Telekom has been testing new environmentally-friendly technologies for the last six years.

By Katja Brösse and Rainer Knirsch, Deutsche Telekom

functions. In 2009, two complete districts need is a smartphone. Real-time rideshar- social challenges. The projects focus For Deutsche Telekom, developing and was launched across Germany on Au- and smart grids will offer consumers of Friedrichshafen with 1,600 households ing connects the driver’s internet-capable on the issues of energy, transportation, propagating environmentally-friendly gust 31, 2012, De-Mail had already been greater transparency and thereby help were networked, thereby taking the first navigation software with the smartphones and healthcare, with partners building technologies is not just an obligation piloted for six months in T-City Fried- to manage their electricity consumption step toward a smart grid. The pilot also of potential passengers. Using a real-time on previous successes. In the area of under the Global Compact and a moral richshafen with 40 participants from in a more targeted way and save energy. allowed the project planners to test the analysis of traffic movements, the system energy, the aim is to improve security imperative, it is also a business opportu- companies and administration and more But real-time information will also be basic functions and use the smart meters can tell the passenger in just a few seconds of supply and save energy costs. In the nity. According to the study Smart2020 than 1,000 retail customers. The service required to make the grid fit for a future in different building / residential and about rides available in cars on their re- area of transportation, the plan is to push Germany Addendum, around 207 mega- not only helps to save time and money, it in which electricity will increasingly be installation situations. Billing options quested route. The driver says how much ahead with the networking of different

tons of CO2 equivalent can be saved is also environmentally-friendly. The In- generated locally by a large number of that enable new rate plans, thereby en- he wants to charge in cents per kilometer. forms of transport, to reduce traffic, and by 2020 with the help of intelligent stitute for Applied Ecology (Öko-Institut) different producers through the inclu- couraging customers to save electricity, The smartphone app uses this figure to – through progressive mobility systems – ICT solutions. Since 2007, the city of in Freiburg drew up the product carbon sion of renewable energies. were also introduced. The findings from calculate the ride price and enables the to protect the environment directly and Friedrichshafen has been Deutsche footprint for De-Mail in accordance with The initial test phase in 2008 fo- this project are being applied in the passenger to make a price comparison of indirectly. And finally, healthcare will be Telekom’s future lab and partner under ISO standard 14040 / 14044 and calculates cused on smart meters. Some 300 in- further development of the completely the various rides available, as well as to made safer and more affordable through the motto “T-City Friedrichshafen. Living that De-Mail can save 77 percent of the terested users tested the equipment in connected home. Smart-metering solu- pay without cash using a one-click pay- technological developments. the future.” Taking a medium-sized city carbon emissions produced in the send- their homes and gave feedback on the tions have now been installed for a num- ment system. To use the service, users By carefully piloting the technolo- in Germany as an example, the project ing of conventional letters. Based on ber of customers throughout Germany. must first register on an online platform gies and through direct customer feed- has realized examples of the Group’s 2013, this corresponds to 25,801 metric According to SMARTer2020*, the smart and enroll for cashless payment. back, future products and services will

vision of connected life and work. The tons of CO2 or the annual energy re- grid sector could potentially result in a be optimized at an early stage. At the

findings from numerous projects are quirement of around 10,500 four-person reduction of about 2 Gt CO2 equivalent Building on successes same time, potential partners and cus- currently being used across Germany, households. Even if some De-Mail users overall by 2020. tomers have the opportunity to check for example in public administration, also print out the relevant documents, T-City has also piloted models for fu- Overall, more than 40 projects from all out solutions locally for themselves. In as well as by energy providers, private there is still a savings potential of 64 ture mobility, which customers through- areas of life have been implemented this way, Deutsche Telekom directly enterprise, and citizens. percent. For 2015, Deutsche Telekom out Germany are now able to use: The in five years. Based on positive expe- helps to research, improve, and propa-

assumes even higher CO2 savings. “real-time ridesharing” service offered by riences from the T-City project, the gate forward-looking, environmentally- From test to reality In the energy segment, T-City flinc, a company from Darmstadt, medi- City of Friedrichshafen and Deutsche friendly technologies. worked with Technische Werke Fried- ates ridesharing options quickly and on Telekom agreed in December 2011 to Take, for example, De-Mail, the first form richshafen and other partners to ex- the move, even for short journeys. The continue to work together for another * Global eSustainability Initiative (2012): of binding and secure electronic commu- tensively test the requirements for a service enables drivers and passengers to three years. This further collaboration SMARTer2020 – The Role of ICT in Driving nication. Before this secure mail service smart grid. In the future, smart meters find each other automatically. All users is to concentrate rigorously on major a Sustainable Future.

118 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 119 Good Practice Environment p ou Furthermore, the EDF Group will pursue Corporate Responsibility – Water management the work started with the preparation EDF Group is engaged in preserving water of the 6th World Water Forum on the EDF G r EDF linkages between water, energy, and resources in all its activities food, in particular with the Consortium (publication, starting in 2015, of the water footprint at Group level) in action of International Agricultural Research Centers and International Wetlands, who Water valuation to optimize water use in the Durance Valley, France By EDF Group decided to join this last commitment EDF used water valuation to help the decision-making process for optimal water by pursuing the works on the nexus management in the watershed along the 250 km Durance River, in southeast between water, energy, and food. France, with respect to competing multi-purpose uses of water. These include Water is used in energy production and supply, and, in turn, energy is used for pumping, agriculture, tourism (fishing, swimming, sailing, etc.), hydropower, drinking water, moving, and treating water. As a result, in a context of climate change, the linkages between and flood control. The overall aim was to optimize water allocation between energy both energy and water systems have grown more complex and interdependent. generation and irrigation and to develop appropriate incentives for water savings in order to restore financial margins, and to answer future water demand from other users. The value used for water was the energy cost (€ / kWh), based on current and future prices in France, linked to energy productivity (m3 / kWh) and the volume of water used (m3) by the hydropower plant. The main business argument for the For many years, the EDF Group has been deal with agriculture, drinking water, regarding the assessment and manage- valuation study was to clearly demonstrate the benefits of optimizing water uses developing specific skills in the fields tourism, industry, and energy issues ment of the Group’s water footprint (or for each party and to define the level of remuneration for this savings. The ap- of water resources management, mete- that involve a sustainable development impacts) from its electricity generation. proach adopted was to implement a Water Saving Convention, signed by EDF and orological forecast, and environment perspective. the two main irrigators, for a six-year period with the possibility to adjust it if it preservation in order to better optimize To deepen its knowledge of the syner- achieved better results than expected. To balance these efforts, EDF has made a its power generation and water resources In the field of thermal power plants (in- gies between water and electricity, the commitment to remunerate the partners for their savings. The deal was so effec- while protecting ecosystems. EDF oper- cluding nuclear), water is needed for cool- EDF Group – in conjunction with the tive that a first additional agreement was signed in 2003 and a second one in 2006 ates nearly 500 hydropower plants and ing systems, either once-through cooling scientific community – decides to invest to increase the savings target from 44 to 65 and then to 90 million cubic meters – has been recognized for its worldwide systems or re-circulating cooling systems the necessary means in the development showing a decrease in agricultural consumption from 310 million cubic meters experience in the design and operation (tower). Water intake, utilization, and of the methods and tools to estimate the in 1997 to 201 million cubic meters in 2005. The results showed that, in addition of multi-purpose hydro schemes that thermal discharge are important param- water footprint of its activities of electric- to the volume of water saved, a key benefit was the timing of the water savings eters in terms of water resources. They ity production within the territories that because the saved water could be used to generate more electricity during peak are factored into optimization studies for welcome its facilities. periods of electricity demand when electricity prices are higher. Both parties come the design, operation, and maintenance out ahead, with a third winner being ecosystems, as around 84 percent of the water of power plant cooling circuits. While The EDF Group makes a commitment savings are used for ecological purposes. these circuits currently rate among the to manage the water footprint of its “best available techniques” for industrial activities of electricity production. In UTE Norte Fluminense: Keeping the planet blue cooling systems, efforts are continuously particular: In Brazil, UTE Norte Fluminense (EDF 90 %) has put in place a full program to being made to improve their design and • to carry on the improvements in per- reduce the use of water in its Macaé CCGT power station, in Rio State. The project operation in order to limit their impact formance in terms of water withdrawal started three years ago with the identification and reduction of all leaks and the on water resources. Therefore, water and consumption of existing and future reduction of purges. This first stage also involved ensuring employees were aware is naturally at the heart of EDF’s core power plants; and involved. The results were impressive: a 30 percent reduction in water use. business and skills. • to look for the best possible efficiency In 2011 the station management went further and launched the construction of a of the use of water on the scale of ter- rainwater capture system, which allowed them to reduce by a further 5 percent Being aware of the current stakes related ritories and catchment basins. the water extracted from the Macaé River (100,000 - 150,000 m3 of rainwater is to the nexus between water, energy, and collected per year). Raising the bar further, 2012 saw the launch of a program to food, the EDF Group was deeply involved In accordance with its CSR commitments, collect all processed water in order to re-inject it into the plant’s water circuits. in preparations for the 6th World Water when it develops a project for electric- The aim is to reduce water consumption by a further 15 percent. These large Forum in Marseille in March 2012 – ity production in a territory, the EDF investments (€ 3.8 million), with a payback over 18 years, would not have seen particularly in the key priority topics Group makes a commitment to create the light of day without the support of the Board of Directors. But there were also “Harmonize water and energy” and “Wa- some value locally and to minimize its indirect benefits: employees who are even more proud of their power station, sub- ter, energy, food nexus” – and signed a water footprint by integrating elements contractors who are more involved, and local groups and NGOs who are on board dedicated partnership agreement with from the design phase. In particular, the with a thermal power plant whose operation is focused on respecting the environ- the International Committee of the EDF Group will use the Hydropower ment. At the same time, UTE is collaborating with a university in Rio on research Forum and the World Water Council. Sustainability Assessment Protocol of the into reducing water evaporation from cooling towers, which represents 80 percent Following are the visible and strong International Hydropower Association of water extractions from the river. commitments made by EDF, in particular for its hydro projects.

120 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 121 Good Practice Environment s o one estimate, if every pump operator “A cap starting at the 2008 levels will switched to high-efficiency pump systems, r u ndf Making a sustainable the world could immediately cut 4 per- G allow us, in the long run, to head cent of its electricity consumption – an toward our ultimate goal of becoming amount equal to the residential electricity business of sustainability emissions-neutral.” consumption of 1 billion people.

Grundfos Director of Sustainability, Karen Touborg, Manager, Group Environment, Health & Safety Pernille Blach Hansen, sums up her com- pany’s view of the responsibility of indus- trial companies like itself: “Our energy By Hanne Joergensen, Grundfos usage continues to increase at an aston- ishing rate. Listening to most scientists From humble beginnings in rural Den- emissions. And this is what they found: and forecasts, we need to act now in order

Pump manufacturer Grundfos has faced up to its role in industrial energy overconsumption mark, the Grundfos Group has grown to Pumps account for 10 percent of the to reduce CO2 and create sustainable liv- and the resulting CO emissions. The company’s response has been to rehabilitate its become the world’s largest pump tech- world’s electricity consumption. At the ing patterns. We have the technologies 2 nology manufacturer with a presence same time, 20 percent of current glob- needed – we just need to start using them, products from being energy offenders to becoming a genuine part of the solution. In the in 55 countries. More than 16 million al CO2 emissions come from the value especially within the larger industrial spirit of the Global Compact, Grundfos has also taken an active role in advocating the pump units roll off its production lines chains in which Grundfos does business. sectors. They have a huge responsibility role of business in promoting greater environmental responsibility and developing each year. In fact, it is fair to say that and societal obligation to lead the way.” wherever you are in the world, you are For Grundfos this information in the environmentally-friendly technologies never too far from a Grundfos pump or wider context of global warming has ac- Over the last decade, Grundfos has ac- related product. celerated rather than prompted its many cepted its responsibility as a contributor sustainability-focused initiatives. Long to the world’s runaway energy consump- Uniquely placed to make a before carbon emissions or green legisla- tion and the carbon emissions resulting difference from it. It now actively pursues a future in which its products and policies exem- Grundfos has always been progressive plify corporate sustainability at work. in terms of corporate sustainability and responsibility. It has an established set of Pumps account for 10 percent of Getting its own house in order first business principles, a clearly communi- the world’s electricity consump- cated set of policies and strategies, and tion. However, if every pump op- Complying with corporate social respon- an organization dedicated to executing erator switched to high-efficiency sibility calls for a change in habits within these strategies globally. pump systems, the world could organizations of all sizes. In Grundfos’ immediately cut 4 percent of its case, the company has applied its aspira- When it comes to the practical applica- electricity consumption – tions to its own operations. tion of these strategies, Grundfos natu- an amount equal to the residen- rally focuses on its key product: pumps. tial electricity consumption of That has included a cap on carbon emis- With good reason: Pumps actually rep- 1 billion people. sions, with the company pledging to

resent one of the best opportunities to never exceed its 2008 CO2 output. Karen immediately curb global energy expen- Touborg, Manager, Group Environment, ditures and carbon emissions. Health & Safety, adds that “a cap starting at the 2008 levels will allow us, in the This is because pumps are working be- tion entered the general consciousness, long run, to head toward our ultimate hind the scenes everywhere in our daily Grundfos was exploring more energy- goal of becoming emissions-neutral.” lives: from supplying water to domestic efficient products. shower and kitchen facilities to moving Since 2009, ongoing efforts have ensured any kinds of liquids in industrial com- Pumps: already proven and present that all pump installations have been plexes and processes. But even many audited and, if necessary, replaced with Grundfos employees were surprised by The result of Grundfos’ early interest in high-efficiency pumps. More than 1,000 the findings of a series of recent studies. energy efficiency is that unlike many pumps have been replaced in Grundfos’ These weighed up exactly how much more high-profile sustainable-energy Bjerringbro headquarters’ factories alone, of an impact pumps have on global en- technologies, energy-efficient pumps with the resulting energy reductions ergy resources and, implicitly, carbon are a proven reality. And, according to ranging from 27 to 82 percent.

122 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 123 Good Practice Environment s o Pernille Blach Hansen believes more and Water2life – safe and clean drinking more companies are joining Grundfos r u ndf and realizing the long-term financial G water in the third world benefits offered by sustainable initia- tives. She says: “Earlier, sustainability work was regarded as a marketing spend by most companies – something you There are currently 1 billion people in the world who lack access to safe, clean ought to do. But today, more and more water. Three million people, half of them under age five, die each year as a realize that it is an area that offers the consequence. This has spurred Grundfos to develop an employee program in benefit of both savings and a return on which its staff can donate money to the Water2Life scheme. investment.” This is a collaborative effort in which Grundfos and its external partners pro- vide sustainable water solutions for some of the world’s poorest communities. Eventually companies may no longer have These are based on Grundfos' own products and adapted to local conditions: a choice. Environmentally-focused legis- from Vietnam, where water is plentiful but undrinkable, to arid Kenya, where lation continues to tighten in response Water2Life systems already make millions of liters of water available to to greater awareness and acceptance of 16,000 people. This initiative enables Grundfos employees to help poor people climate change. This means sustainable gain access to one of the fundamentals of life – clean water. initiatives are very much an investment in the future.

For Grundfos, a company with a unique capacity to make a real difference, sus- tainability has become a company ethos. Grundfos has also committed itself to diffusion of environmentally friendly of relevant people, from company pur- It is an ethos that has enhanced rather ensuring that all new buildings are en- technologies.” Grundfos has actively chasers to CSR managers to politicians. than hindered profitability, providing a ergy-efficient, as befits a signatory to the delivered on both principles, bringing Its goal is as crucial as it is simple – to Act NOW – a forum heartening example for companies that World Business Council for Sustainable the full weight of its global reach and make people understand just how real for positive change still regard corporate social responsibility Development’s manifesto on Energy technological leadership. and present the issue is, while informing as a forced expense rather than a viable Efficiency in Buildings. Today, all new them how the ever-present pumps they business model. Grundfos buildings must be LEED Gold Fostering awareness of the take for granted could make an immedi- certified, while all renovations must challenge… ate and radical difference. “Our course is set,” concludes Pernille Grundfos is a founding member of ACT NOW, a partnership platform made up of meet LEED certification. Blach Hansen . “Our future as a company individuals from private, public, and nongovernmental organizations. It acts as Over the past few years Grundfos has As there are many who remain uncon- is closely bound with the Principles of a corporate forum and network for the exchange of energy-efficiency ideas and A vivid example of this policy at work put a great deal of focus on creating vinced of the reality or urgency of global the Global Compact and sustainable best practice examples. It also aims to generate awareness among commercial is the company’s recently refurbished awareness of the role of pumps in in- warming, the campaign has also empha- practice. It is not only the responsible decision-makers by making the most of its unique position as a business-driven British headquarters. This features en- dustrial energy overconsumption, along sized that reduced energy consumption thing to do, we believe this is the only voice in the world of energy and climate initiatives. ergy-efficient pumps along with solar translates to lower power bills and that way to sustain successful business into roof panels that supply hot water and energy-efficient installation or retrofit- the future.” supplement electricity usage. Similarly, ting may cost a little more to start with, Grundfos’ new Indian complex is packed but in the long run saves a lot of money. with sustainability initiatives that have seen it become the country’s first gold- … and introducing a practical pumps at their maximum capacity at all Ultimately, it’s just good business rated green building. solution times both unnecessary and wasteful. About Grundfos Grundfos’ intelligent pump solutions Pernille Blach Hansen regards the success Putting aspiration into action Meet the Energy Challenge NOW has regulate themselves to avoid this. of Grundfos and the welfare of the envi- been run in conjunction with the release ronment and our society to be “mutually Of the Ten Principles of the Global Com- of next-generation high-efficiency pump These energy-optimised pump solutions reinforcing.” She says: “Fundamentally, Established: 1945 pact, there are two that are especially technology. Pumps are an often over- exemplify Grundfos’ contribution toward we believe that Grundfos and the societies close to Grundfos’ heart. These are Global with their potential as an immediate looked opportunity for energy savings. reductions in the use of industrial energy, in which we operate are interdependent. Headquarters: Bjerringbro, Compact Principle 8: “Businesses should solution. This has centered on the Meet This is because most run at full speed at in that they are a proven technology, ac- Successful companies need healthy socie- Denmark, represented in undertake initiatives to promote great- the Energy Challenge NOW campaign. all times when, in fact, they rarely need to. cessible to everyone, and available now. ties, and healthy societies need success- 50 + countries er environmental responsibility” and Disseminated through multiple media A typical example of this is hotels, where Furthermore, most of these perform at a ful companies. Therefore, our business Global Compact Principle 9: “Businesses channels, including social media, this very few guests will take showers during level that surpasses current and upcom- decisions follow the principle of shared Employees: 18,000 should encourage the development and campaign has targeted a broad array the late hours. This makes maintaining ing legislative requirements. value – value that benefit both sides.”

124 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 125 Good Practice Environment

technologies developed under national the CO2 emissions of aircraft engines: ngines MTU Aero Engines: Award- and European research programs. With With its Clean Air Engine (Claire) tech-

o E both components, MTU is setting new nology initiative, the company aims to standards worldwide. reduce its CO emissions by 30 percent er 2 by the year 2035 in staged goals. The U A Winning Technology The GTF concept is catching on: The GTF engine alone already provides a MT engine has meanwhile developed into reduction in CO2 emissions of around a bestseller. Some 3,500 orders have 15 percent. The second stage is aimed been received to date. First applications at reducing emissions by at least 20 include the Bombardier CSeries and percent by the year 2025. This can be Mitsubishi MRJ regional jets, the Air- achieved by making thrust generation By Martina Vollmuth, MTU Aero Engines bus A320neo short- and medium-haul even more efficient, for instance through aircraft, and the Irkut MS-21. Last but the further development of individual not least, Embraer, too, has selected the components or through the use of a In view of increasingly scarce resources, rising fuel prices, and the growth in air traffic – which The geared turbofan is based on an en- clean engine as the powerplant for its shrouded, counter-rotating propfan. The continues unabated at an average rate of 5 percent per year – passengers, people living in the tirely new engine architecture: What sets second-generation E-Jets. necessary technologies were developed this innovative propulsion system apart by MTU already back in the 1980s. The vicinity of airports, authorities, organizations, and other players in the aviation industry are is that it features a reduction gearbox The geared turbofan offers even more company expects to achieve the 30 per- calling for more fuel-thrifty and cleaner aircraft and engines. MTU Aero Engines has been work- between the fan – that is, the large savings potential, and work on its opti- cent target in 2035. In the third and last ing on innovative technologies for decades to further improve the environmental compatibility rotor at the engine inlet – and the low- mization has already commenced. Jointly stage, the efficiency of the core engine pressure turbine, which drives the fan. with Bauhaus Luftfahrt, MTU has defined will be further enhanced, for example of future engines. With today’s engines, the two are seated an ambitious program to further reduce through the use of a heat exchanger. on a common shaft. Uncoupling the two components allows the fan with its large diameter to rotate more slowly and The target: Each new engine is to burn the turbine to rotate much faster. This less fuel and be cleaner and quieter than lets the individual components achieve MTU – An established global player its predecessor model. The key to success: their respective optimum speeds, greatly With the PurePower® PW1000G Geared boosting the geared turbofan’s efficiency. Turbofan™ (GTF), MTU and its US partner The result is a significant reduction in

Pratt & Whitney have developed a solu- fuel consumption, emissions of CO2, and With more than 75 years in the aircraft engine business, MTU Aero Engines tion for meeting the exacting require- noise; moreover, the propulsion system and its predecessor companies have acquired unique expertise and experience ments of the future. They are building is much lighter than a conventional en- that makes it an established player and must-have partner in the engine com- a highly advanced engine that burns 15 gine, as it has fewer stages, and hence a munity. The company is a technological leader in high-pressure compressors, percent less fuel, emits 15 percent less lower parts count. low-pressure turbines, manufacturing processes, and repair techniques. CO , and cuts the perceived noise level 2 MTU has a workforce of 8,500 employees worldwide and operates affiliates in half. It marks the debut of a new fam- Apart from the high-speed, low-pressure in all important regions and markets. The site in the north of Munich is home ily of environmentally friendly engines. turbine, MTU also contributes the for- to its corporate headquarters and the MTU Group’s biggest location. In fiscal ward four stages of the high-pressure 2012, the company posted consolidated sales of around € 3.4 billion. MTU An indispensable, key component of the compressor to the GTF. This new transon- Maintenance is the world’s largest independent provider of maintenance GTF is MTU’s high-speed, low-pressure ic compressor is characterized by a mark- services for commercial engines. In the military arena, MTU Aero Engines is turbine. Germany’s leading engine edly increased efficiency, which gives it a Germany’s leading industrial company for practically all engines flown by the builder has been specializing in low- clear edge over most existing commercial country’s military. pressure turbines (LPT) for aircraft en- models. It comes as an all-blisk design – gines for decades and has become the blisks (blade-integrated disks) are high- MTU is fully committed to operating in a green and sustainable manner. The world’s technology leader in this field. tech rotors in which the disk and blades company makes it a point to ensure that its products as well as its manufac- The company’s masterpiece is the high- are produced as a single piece, eliminat- turing and maintenance processes meet the most stringent environmental speed turbine for the GTF, which beats ing the need for blade roots and disk standards. MTU makes conscious use of resources, materials, and energy, conventional models by a wide margin. slots. This increases strength and lowers and it keeps noise and pollutant emissions in its production and maintenance MTU is the leading manufacturer of this weight. The GTF is a textbook example of shops as low as possible. The German engine manufacturer takes its respon- engine component worldwide. In March successful technology development fund- sibility for the environment very seriously: The protection of the environment and April 2013, the company won two ing: Two of its key components – the is one of MTU’s corporate objectives and a responsibility shared by everyone in German Industry Innovation Awards for high-speed, low-pressure turbine and the the organization. the novel technology. high-pressure compressor – are based on

126 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 127 Good Practice Environment

ing effects on the gray whale popu- during the multi-year construction, the • Ballast water discharge nergy lation. Following up on the experts’ eagle’s fertility rate remained at the The migration of alien organisms from E Implementation of the recommendations, Sakhalin Energy average for the population. one region to another within ships’ bal- has adjusted their production plans. To assess the condition of the whole last water poses a global problem, often So, despite the considerable financial population, the Company’s studies cov- leading to major environmental and akhalin Biodiversity Action Plan costs, the construction of a pipeline for ered not only the potentially impacted economic disasters. Sakhalin Energy S a year was postponed, the route was area, but also a vast territory in the decided to use international practices changed, a seismic survey was post- northeastern part of Sakhalin. Once based on the IMO Convention for the on Sakhalin Island poned, etc. Within the framework of Sakhalin-2 entered the operational phase, Control and Management of Ships’ Bal- the research on gray whales, there was the Company updated the monitoring last Water and Sediments requirements.

By Andrey Samatov, Valentina Andreeva, Alexey Vladimirov, and Elena Arkhipova, Sakhalin Energy

As the first company in Russia to start shelf hydrocarbons production from offshore ice- resistant platforms and liquefied natural gas production, Sakhalin Energy can be justifiably proud of its achievements in the field of environmental protection. The environmental control, local monitoring, and conservation of biodiversity programs implemented by Sakhalin Energy are among best practices and are aimed at minimizing the impacts on the unique ecosystems of Sakhalin Island.

When carrying out any work, one of our tion. It describes the framework and ra- Sakhalin-2 project lenders. Thus, the also an international satellite tagging program. For details, see “The Steller’s Although Russia ratified the Convention foremost priorities is to comply with tionale to support monitoring programs BAP implementation is supported by all program, which has already yielded Sea Eagle” at www.sakhalinenergy.ru/en/ in April 2012, it will not take effect Russian and international requirements. that Sakhalin Energy, its stakeholders, stakeholders at both the national and some very interesting results about documents/Steller_Sea_Eagle.pdf. until it is signed by 30 maritime na- The Company undertakes a large number government authorities, and project international levels. Below are short the migration patterns of animals in tions holding 35 percent of the world’s of long-term programs and reviews the lenders believe are important – not descriptions of some of those programs. the North Pacific Ocean. • Wetlands merchant tonnage. environmental conditions in the vicinity only because it provides environmental The program’s details are present- Sakhalin wetlands have a unique value As early as 2009, Sakhalin En- of the project facilities while monitoring protection, but also because it makes • Gray whales ed on the IUCN website www.iucn. to Sakhalin’s natural environment. The ergy developed and implemented an flora and vegetation, avifauna, mammals, good business sense. Every summer a small gray whale group org/wgwap/ and at “Gray Whales. The wetlands absorb precipitation and feed integrated Ballast Water Management soil, ground waters, river ecosystems, feeds off the northeast coast of Sakhalin, Sakhalin Story” at www.sakhalinenergy. water to streams and rivers, maintain- Policy. For the purpose of compliance and the marine environment. These The Biodiversity Action Plan includes near the Piltun-Astokhskoye oil-gas ru/ru/documents/wgw_book_web.pdf. ing the surface water balance, and are with this policy, each vessel is inspected priorities are reflected in Sakhalin En- programs to preserve the most important field. This proximity obliges Sakhalin therefore very important for migrating for a number of parameters, and dis- ergy’s Sustainable Development Policy, rare and threatened species (gray whales, Energy to take enhanced environmen- • Steller’s Sea Eagles and spawning salmon. It is necessary charge is allowed only after confir- Commitments and Policy on HSE and the Steller’s Sea Eagle, Hucho perryi) as tal protection measures in its offshore A program was launched in 2004 to study for Sakhalin Energy to make sure pipe- mation of ballast water replacement Social Performance, Biodiversity Stand- well as programs for the conservation activities. Recognizing the potential and preserve the Steller’s Sea Eagle in line construction does not affect these in the open sea. Efficiency of these ard, among other things. of particularly vulnerable ecosystems impact, Sakhalin Energy – together the northeastern part of Sakhalin. In the fragile ecosystems. Mitigation measures control measures is checked through (e. g., wetlands, area of protected bird with Exxon Neftegaz Ltd., the operator course of construction work, Sakhalin included temporary restrictions on biological analysis of ballast waters of In 2008 the Company developed an inte- colonies adjacent to the Chayvo lagoon, of Sakhalin-1 – has been financing Energy paid a great deal of attention to work; requirements for equipment; the tankers. grated Biodiversity Action Plan (BAP). In and the coastal zone of Aniva Bay around programs to study and monitor the impact mitigation. For example, each of arrangement of plank roads (temporary Every year since 2007, the Com- a way, this plan became the end result the Prigorodnoye production complex). gray whales since 1996. the occupied nests impacted by construc- roads); earthworks only for the trench pany has been monitoring Aniva Bay of the Company’s multi-year efforts for In association with the IUCN tion was assigned as a protective zone; line; and reclamation of right-of-way. near Prigorodnoye production complex environmental preservation. The plan Sakhalin Energy’s BAP was approved by Western Gray Whale Advisory Panel, eagle couples were constantly monitored The Company monitored the rein- by sampling and analyzing plankton, systematizes the Company’s experience the Biodiversity Expert Working Group initiated by Sakhalin Energy in 2004, in certain nesting areas where the poten- statement of wetlands after construc- benthos, and epibioses. Monitored re- and simultaneously defines further ac- of the Sakhalin Oblast Environmental the Company has used the data from tial impact was high, etc. These efforts tion as well as any potential long-term sults have led to the firm conclusion tions to be taken under environmental Council and was highly praised by in- these studies to draw up and implement minimized the construction’s impact: impacts caused by the construction or that the Company’s controls are highly monitoring and adverse impact mitiga- dependent international experts and a plan for monitoring and mitigat- All nesting areas were preserved, and presence of pipelines. effective.

128 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 129 Good Practice Anti-Corruption

message across, and teaching employees Merck’s distinctive Compliance Com- eeper how to act responsibly, to respect the fine munication Campaign when introducing K Comprehensive Ways of line between prohibited and allowed a new Whistleblowing System behavior, and to recognize this grey area siness Communication on is another thing completely. Bu “To establish compliance processes, struc- tures, codes of conduct, and to integrate in case misconduct is observed. The mani- Anti-Corruption Measures an effective whistleblowing system nor- fold possibilities include the line manager, mally outweighs the effort to set up the compliance team, and a functioning adequate communication measures. We whistleblowing system that guarantees and Compliance need to develop a certain awareness re- confidentiality or even anonymity. garding the communication toward the desired target group. Communication is In this context, it is advisable that the crucial for the success, acceptance, and compliance units make use of the spe- efficiency of the compliance program,” cific competences of the communication By Jenice Hartmann, Business Keeper says Kenan Tur, founder and Executive departments. A campaign using joint Board Member of Business Keeper AG. forces may be much more effective than the mere dissemination of compliance Nowadays, there is agreement within companies and the Hence, communication on compliance content. public that neither corruption nor other contraventions must be practically-oriented, innova- tive, and convincing. Only through the For too long, compliance departments Business Keeper AG of national and international regulations are acceptable. continuous sensitization of employees have disregarded the fact that communi- Corruption causes an estimated economic harm of up to regarding the important topic of anti- cation toward the target group not only US $ 4 trillion per year; the number of unreported cases and corruption and compliance can last- needs to be informative but also convinc- ing changes be achieved and an overall ing in order to increase consciousness Business Keeper AG is located not quantifiable social harm through the erosion of trust consciousness of value-based economic and encourage acceptance for compli- in Berlin, Germany, and provides and the economic systems is much higher. As is publicly practices be developed and maintained. ance issues and whistleblowing systems. the BKMS® System as a unique known, companies such as Wal-Mart, Monsanto, and Internal communication on compliance solution to establish a 24 / 7 Thus, it is advisable to tackle the corporate topics must nowadays be practical and whistleblowing system in order General Electric were strongly sanctioned by government culture, which in turn may necessitate true-to-life. Therefore, compliance and to discover contravention and and society for their corrupt business activities. In times a change management. Following the corporate communication departments misconduct at an early stage. of financial crisis, a sustainable business model is more theory of Kurt Lewin, the first step is to have to align their communication efforts Today, the BKMS® System is used catch freezing. This can be reached, for to close this gap. For globally engaged in more than 196 countries and important than ever to ensure the necessary social example, by offering the clear positioning enterprises it is advisable to consider regions worldwide and is available acceptance and “license to operate.” of the CEO on the topic of anti-corruption. cultural differences – for example, based in 52 languages. Announced in different communication on historical incidents in the country – channels, it emphasizes the relevance of when launching a whistleblowing system. Customers of Business Keeper AG compliance with the support of the top In general, a decentralized and cultur- appreciate the certified security This is one of the reasons why multina- ance units in order to guide and control guidelines. Unfortunately, these docu- management and shows that the written ally adapted communication is likely to of the application as well as the tional companies as well as an increas- the legal behavior of all actors in the ments often remain unnoticed in the values are actively pursued. During the generate higher acceptance throughout fact that only authorized examin- ing number of small and medium-sized company. everyday work process and are therefore second phase, the moving, new solutions the stakeholders. ers have access to the data. The companies – and not only members of not sufficiently effective. are generated, new behaviors are tried, postbox functionality, which the the Global Compact that comply with There are many stakeholders who should and a change movement is carried out. It needs to be considered that compliance whistleblower can use while Principle 10 – have established compli- be informed about companies’ targets, The challenges that compliance units At this point, the employees must be ad- without adequate communication can remaining anonymous, bridges the measures, and projects regarding the pre- face are providing a convincing introduc- dressed with adequate communication lead to the same risks as the nonexistence gap between anonymity and the vention of corruption. Besides customers, tion and to continuously communicate instruments and be sensitized to these. of compliance – or even worse. With re- dialogue between the examiner suppliers, the government, and society, the principles of responsible conduct The ideal case would entail integrated spect to recent scandals in the corporate and the whistleblower. Possessing the employees are a very important target and accompanying measures. The ad- thinking, which means that integrity and world, one can ask why contraventions more than 10 years of experience, Hypo Alpe-Adria’s communication group. They should know very well the mittedly rather dry nature of juridical compliance are automatically included still occur even if extensive compliance Business Keeper AG is a reliable with respect to the implementation documents that compliance departments facts, rules, and laws may create even as elements of every decision within the structures have been built. One of the and competent compliance part- of the BKMS® System as one result usually elaborate upon – that is to say greater difficulties. Therefore, it is one company. Within the context of the last reasons might be that the potential of ner for companies and organiza- of its efforts to introduce an effective codes of conduct and guidelines on dif- thing to establish guidelines and codes, phase, the refreezing, communication a genuine compliance communication tions. Compliance Organization ferent topics, for example anti-corruption but bringing them to life, getting the channels that should be used are defined has not yet been exploited.

130 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 131 Good Practice Anti-Corruption

T hales Integrity, As a Core A GLOBAL LEADER IN THE QUEST FOR SECURITY

Strategic Imperative! With operations in 56 countries and 66,000 employees – of whom 22,500 are high-level researchers and engineers – Thales is a world leader in critical infor- mation systems for the defense, security, aerospace, and transportation markets. The technological expertise that the company has been cultivating for more than a century by the International Forum on Business Building on its expertise in the most sophisticated technologies and large-scale Ethical Conduct (www.ifbec.info), which is crucial to the security of people, goods, and information. Thales is therefore in a unique software systems, Thales is stepping up to the security challenges of its custom- is a joint structure of the AeroSpace and position and has a particular responsibility to its stakeholders and to society at large. ers in an increasingly complex world. The Group has earned particular recogni- Defence Industries Association of Europe tion for its ability to develop and deploy dual civil and military technologies. and the Aerospace Industries Associa- Leveraging its international operations and spanning the entire value chain – from tion of America and of which Thales is equipment to systems and services – Thales plays a pivotal role in making the a founding member. By Dominique Lamoureux, Thales world a safer place. http://sustainability.thalesgroup.com In 2012, Thales was ranked as one of the top 10 companies in the defense sector by Transparency International, an NGO working to fight corruption worldwide. From compliance … objective of a corporate responsibility Thales considers CR to be a strategic im- Zero tolerance pany’s operational processes, particu- Transparency International’s Defence (CR) policy is to ensure compliance not perative for the Group, in that it opens larly during commercial transactions Companies Anti-Corruption Index 2012 A corporate responsibility policy is a only with a vast array of legal and regula- up opportunities for innovation, creates Corruption represents a major risk for involving third parties; report (http://companies.defenceindex. basic necessity for any company that tory requirements, but also with a grow- competitive advantages, and contrib- multinational corporations, particularly • internal alert channels available to the org/report) presents an analysis of the has made a commitment to sustainable ing number of standards, best practice utes directly to the future success of the for those that bid on public contracts. employees; corruption prevention programs of the growth and recognizes the true role of guidelines, and recommendations issued company. This approach is supported The practices of solicitation, extortion, • a robust internal control and audit world’s 129 biggest companies in the its stakeholders. For Thales, the primary by international organizations and civil by a Group-wide Code of Ethics and and passive corruption are still very fre- process; defense sector. society. It is important to meet expecta- a dedicated organization in charge of quent in countries with weak governance. • programs to increase awareness and to tions of the public at large on a range ensuring compliance with the principles This type of practice can expose a com- inform and train Group employees – of environmental and social issues and it sets forth. pany and its officers to civil and criminal programs that are primarily intended those of the society. By embracing these penalties and, in addition, be extremely for those with the greatest potential new responsibilities, companies such A comprehensive training and aware- damaging in terms of reputation. exposure (marketing, sales, projects, GC aDVANCED LEVEL as Thales clearly benefit in terms of im- ness policy is in place across the Group and purchasing). age and reputation. By incorporating to promote participation by all Thales At the end of the 1990s, in order to miti- practical prevention policies into their employees and foster a shared sense gate these risks, Thales established a The policy of “zero tolerance” for any risk-management processes, fraudulent of belonging that is anchored in the policy to prevent corruption that has act of corruption is fully supported by Since 2003, Thales has been a practices are also less likely to occur and concepts of ethics and responsibility. since been incorporated into a process the Group corporate management and proud participant in and supporter legal sanctions can be avoided. Compa- Focusing on excellence and long-term for continuous improvement. Board of Directors. of the United Nations Global nies with strict CR policies therefore sustainability, this approach builds col- Compact and has adopted its deliver better overall performance. lective intelligence on the basis of mutual The Group’s compliance and integrity The participation of the Group within Ten Principles. trust and respect. It forms a common vi- program is regularly evaluated and ad- professional, intergovernmental, and … to a corporate global responsibility sion of the issues Thales faces by sharing justed on the basis of changes in internal nongovernmental organizations is also Reflecting the relevance of its focused on performance meaningful information with others in and external risks and the Group’s com- one of the key factors of its policy to actions in CR, Thales saw its order to understand the risks involved mercial strategy. prevent corruption and to share and UN Global Compact performance As an international company, Thales and to find innovative, proactive re- disseminate best practices. Thales has rating be raised from “active” to conducts its business in a strategic space sponses that stakeholders expect. This global compliance and integrity contributed to the establishment of direc- “advanced” in 2012. Among the of global dimensions and growing com- program is based on: tives and common standards for all busi- 7,300 companies that are partici- plexity. Thus, the Group has put in place Driven by a common vision of the • international organization and dedi- ness sectors, such as the “Best Practice pants of the Global Compact, to a proactive integrity policy and attaches Group’s business and its role in soci- cated resources that are responsible Guidance on Internal Controls, Ethics, date only 386 have been awarded the utmost importance to ethical busi- ety – and empowered by irreproach- for ensuring the implementation of and Compliance” of the OECD and – “Global Compact Advanced” sta- ness practices with respect to custom- able ethical conduct – each employee systems and procedures to prevent more specifically for the aerospace and tus, 18 of them being French and ers, suppliers, employees, shareholders, contributes actively and collectively to corruption; defense sector – the Common Industry only one being in the aerospace financial markets, the environment, and the long-term sustainability and perfor- • the integration of procedures to prevent Standards in Europe, and the Global and defense sector. society at large. mance of Thales. the risk of corruption within the com- Principles of Business Ethics, published

132 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 133 Good Practice

CSR Management

136 BASF 140 Coca-Cola Deutschland 142 HOCHTIEF 144 MAN 148 Ricoh 150 Volkswagen

Development

152 Camposol 153 Copeinca 154 Coop 156 ITOCHU 158 Nestlé 160 Prosegur 162 Sanofi 166 TÜV Rheinland

Financial Markets

168 Arab African International Bank 170 Bradesco 172 Royal Bank of Scotland Group

Overall, the Global Compact pursues two complementary objectives:

1| Mainstream the Ten Principles in business activities around the world

2| Catalyze actions in support of broader UN goals, including the Millennium Development Goals (MDGs)

134 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 135 Good Practice CSR Management

BASF Rewarded for their long-term sustain- Applied Sustainability for ability strategy: Dr. Helfried Giesen, Spokesman of the Westfleisch Executive Board (left), and Jörg Bartel, head of the company’s Central Quality the Foodstuffs Industry Management unit.

Innovative product developments and strategic sustainability tools are tangible measures with which BASF emphasizes By Christine Haupt, BASF its corporate mission: “We create chem- istry for a sustainable future.” One ex- ample is SET – applied sustainability™, Around nine billion people will live on planet earth in the year 2050. This outlook poses which is a customer-oriented sustain- enormous global challenges to us. Innovative strategies turn challenges into opportunities, ability strategy that helps improving sus- tainability along the entire value chain. especially in the chemical industry: BASF’s products and solutions will contribute to conserving resources, ensuring healthy food and nutrition, and improving quality of life. BASF’s division Nutrition & Health de- Sustainability and innovation will be significant driving forces. Three selected case studies velops, produces, and markets a compre- hensive range of products and services show how BASF collaborates in the field of nutrition and health with its customers to for human and animal nutrition, as well customers in the foodstuffs industry analyses and strategies to actual customer produce consumer goods more sustainably. as the pharmaceutical, flavor, and fra- benefit from close collaboration among products, making sustainability tangible grance industries. The division strives BASF’s agricultural experts, feed and food and measurable. Whether it is orange to contribute to a better quality of life ingredient specialists, packaging experts, juice, headache pills, fragrances, or beef – by improving the nutrition, health, and as well as from BASF’s comprehensive every product can be continuously made well-being of people across the world. A view on sustainability challenges along more sustainably, regardless of whether it balance between economic, ecological, the entire value chain. Well-integrated in is produced in a conventional manner or and social needs is a prerequisite to suc- its different stages, BASF can activate the under the provisions of an organic “Bio” cessfully finding the best solutions for a value chain for sustainable development. standard. SET – applied sustainability™ sustainable future. The SET team works takes products “on a journey” to higher together with and for BASF customers and This widespread network also lets BASF sustainability. “The proof of improved other stakeholders to achieve this balance. maintain a clear understanding of what sustainability creates additional value moves the market. BASF is a founding for the consumer, the producer, and his Understanding and activating member and board member of The Sus- brand,” explains Gräper. value chains tainability Consortium (TSC), an independ- ent network that also includes leading and Award-winning sustainability Consumers and retailers are increasingly globally active wholesale corporations and strategy looking for products that contribute to consumer goods manufacturers. “We’re a more sustainable lifestyle. SET – ap- active in the TSC in order to understand A specific example of applied sustainabil-

plied sustainability™ helps foodstuffs consumer expectations from the point ity is the CO2 balance calculated together producers measure the sustainability of view of retailers and of our customers. with meat product marketer Westfleisch of their products and identifies specific This lets us anticipate market demands for the complete pork, beef, and veal potential for improvements along the and find innovative solutions,” explains production chains. Headquartered in entire value chain: from the use of raw Kristina Gräper, head of SET – applied Germany, Westfleisch is one of Europe’s materials through to production and sustainability™, BASF Nutrition & Health. largest marketers of meat products. all the way to consumption by the end- consumer and finally disposal. SET – applied sustainability™ is distin- The SET team, led at the European level guished from many sustainability ini- by Dr. Christoph Günther, investigated

As “The Chemical Company,” BASF pos- tiatives by its direct relationship to the the amount of greenhouse gas (CO2e) A continuous improvement for creating more sustainable beef is good news for future generations. sesses an extraordinarily wide range of product. SET – applied sustainability™ generated along the entire value creation expertise in different industries. Thus, applies comprehensive sustainability chain. Knowing how much greenhouse

136 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 137 Good Practice CSR Management

BASF More sustainably-produced foodstuffs Jan Sverre Røsstad, Vice President, match the consumer’s taste. BioMar North Sea, works closely with BASF on its sustainability strategy.

rape, and wheat was replaced by barley, make the feed more sustainable: The since barley requires less fertilizer. New feed consumed less in terms of marine technologies in the stall also cut down on resources. energy consumption. Also, animal feed conversion was improved. These meas- At the same time the diet was matched to ures were visibly successful: A review of the needs of the salmon. With the help the values for pork carried out three years of the Eco-Efficiency Analysis that was later showed a reduction of 3 percent in developed by BASF and has been success- the annual amount of greenhouse gas fully applied for over 15 years to more emitted to the earth’s atmosphere. than 500 products and processes, BioMar was able to determine fish diets that “Thanks to SET, as a leading company were optimal for both the salmon and in the meat production sector, we were for BioMar. Here BioMar regularly uses

able to calculate a detailed CO2 footprint the BASF Eco-Efficiency Manager, which concern is growing about the social, all the way to beef consumption over for our products. This lets us distinguish is an online tool that accesses the jointly ecological, and economic impacts of time. This quantitative analysis creates ourselves from market competition and collected data in real time and simulates worldwide beef consumption. The US a scientific basis for sound decision mak- actively accommodate our trade partners the environmental and economic effects National Cattlemen’s Beef Association ing when it comes to enhancing the while meeting consumer expectations at of alternative feed recipes at any time. (a contractor to the Beef Checkoff) com- sustainability of manufactured goods the same time,” says Dr. Helfried Giesen, missioned the SET team with the perfor- and designing an end-to-end strategy CEO Westfleisch. On May 3, 2013, West- Salmon fed with optimized fish feeds are mance of a comprehensive sustainability that fosters greater sustainability. The fleisch received the “Meat Vision Award among the highest-quality types and are analysis. The overall goal of the entire baseline data from the analyses will be 2013” from the Industry Press of the a favored choice for salmon-branding project is to take the beef industry on used to analyze opportunities for im- Deutsche Fachverlag for its long-term purposes. Jan Sverre Røsstad, Vice Presi- a journey for continuous improvement provement and establish a direction for and rigorously implemented sustain- dent, BioMar North Sea, emphasizes the for creating more sustainable beef. In improving the sustainability attributes of ability strategy. benefits for all involved: “This strate- the first phase, scientists, consumers, the beef industry. When the project as a gic approach and the innovative tools merchants, nongovernmental organiza- whole is completed, the beef producers Value chain profits from optimized from BASF are helpful to all players in tions, producers, and other stakeholders will receive a tool that will help them fish feed the value chain: BioMar, fish farmers, were surveyed as to which sustainability continuously optimize their operations processors, retailers, and other stake- topics are the most relevant, from their in ecological and economic terms. Another example of applied sustainabil- holders as well. Making sustainability points of view, along the entire value ity is the optimization of fish feed for the tangible and applying it at the product chain for beef in North America and All three examples above show that there Norwegian fish feed producer BioMar. level with SET is very beneficial for us where improvements are necessary. For are no standard paths on the journey to- Since 2007 the SET team and the BASF and our products.” The comprehensive this purpose, the respondents denomi- ward more sustainability. Each company Sustainability Strategy unit have been sustainability strategy of BioMar has nated the most urgent environmental, and industry sector has highly varied gas emissions are generated – and where showed how strongly the production of working together with the customer been certified under the ProSustain™ social, and economic topics related to opportunities for approaching the topic

exactly along the value chain – is the animal feed affects the CO2 balance: More on a long-term sustainability strategy. standard of the foundation Det Norske beef production and consumption. This for itself and its customers. Established

crucial prerequisite for continuously than 50 percent of the CO2 footprint for The goal: Producing salmon feed more Veritas. The foundation has used an in- “outside-in-view” is crucial to gain ad- evaluation methods and independent reducing emissions and effectively com- pork production was based on this factor. environmentally friendly and ensuring dependent evaluation system to define ditional market understanding. certification help to make the topic tan-

municating this success to the market. This included CO2-relevant fertilizers a nutritionally ideal diet for the fish. standards for continuous improvements gible and to convincingly communicate and measures for plant breeding and in product sustainability. In a second step, the SET team investi- progress made. All those involved profit Christoph Günther explains: “There are plant protection upstream in the value Here the BASF team investigated the gates exactly how sustainably the US greatly by using multistakeholder net- a variety of levers for fine-tuning the creation chain. lifecycle of BioMar products and meas- More sustainable beef – A tangible beef industry actually produces beef works such as the UN Global Compact improvement of sustainability. With ured their sustainability along the entire vision? and how various measures can impact to exchange information on positive our comprehensive approach we find Westfleisch took some effective steps, value chain. The analyses clearly showed ecological, social, and economic factors. examples as well as on difficulties en- potential for optimization and help our together with its mixed-feed partners: that an increase in the amount of added A juicy, nutritious beef steak has been The experts analyze the manufacturing countered, making it possible to learn customers exploit this potential.” In 2010 The soya in feed imported from overseas plant proteins and a more balanced an integral part of the human diet for processes of the US beef industry – from from one another while working toward

the first CO2 balance for pork clearly was replaced in part by domestic oil-seed use of fish meals and fish oils would thousands of years. At the same time, feed production to animal husbandry a more sustainable future.

138 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 139 Good Practice CSR Management

a share that is almost three more strongly with joy of living than with Combining Sustainability times higher than the renunciation. Sustainability matches the market average for core values of many Coca-Cola brands. tschland non-alcoholic bev- Already in the past, the Xmas truck tour e u

D erages (22.4 %). was used to support social initiatives with Happiness financially and in terms of communica- la As an employ- tion (Nordoff Robbins Foundation, SOS -Co er, Coca-Cola children villages, A Heart for Children). ca promotes Today, Mission Olympic places happiness

Co Coca-Cola has been operating in Germany for more than 80 years and was named the world’s above all and physical activity center stage and most valuable brand yet again in 2012 by Interbrand. Consumers increasingly expect the manu- the diver- Coca-Cola leverages the awareness of its facturers of their favorite brands to operate in an ecologically, socially, and economically re- sity of its own brands in order to promote socially associates relevant topics. With Coca-Cola light, sponsible manner in order to protect the natural resources of society – today and in the future. and wom- the company wishes to raise awareness In 2011 Coca-Cola Germany was presented with the Silver Award for Sustainable Manufacturer en in man- about the heart health of women. In by Die Verbraucher Initiative e.V. (consumer initiative association). agement po- December 2011, it started the initiative sitions. The “Listen to Your Heart” with the German community Society for Gender Medicine as a partner. commitment of This was followed in 2012 by the Fanta the company and Playground Initiative for safer and free its associates at the playing, together with the German Child By Uwe Kleinert, Coca-Cola Deutschland more than 60 locations and Youth Welfare Organization and TÜV in Germany are part of the Rheinland. The company envisages an basic understanding of corpo- increasing integration of these aspects The strategy of Coca-Cola Germany is soft drinks, iced teas, and sports drinks, in the education of children. Therefore, Finally, the water required for the bever- rate social responsibility. The company into its communication about future not geared toward individual sustain- there is always a sugar-free and calorie- we do not target any advertising to chil- ages themselves is to be replaced by 2020 organizes every year a sustainability brands that represent a positive attitude able products but toward the entire pro- free alternative. Transparent product dren below the age of 12 and consider through water recovery projects (e. g. activation month, during which more toward life. duction and distribution process for all information on the label ensures that schools to be advertising-free zones. In rain recovery, building of wells). Already than 500 associates are involved in 40 to products. In this connection, goals have consumers can obtain comprehensive concrete terms, this means that: no ad- today, around 400 of these projects are 50 regional ecological or social projects. been defined in seven fields of sustain- information to make the right purchas- vertising is inserted in media that targets up and running around the world. In the ability. With a view toward a balanced ing choice. more than 35 percent of children below field of climate protection, the company In 2012 Coca-Cola Germany published diet, the company offers more than 70 the age of 12; no beverages are sold in is working on the supply chain in areas its second Sustainability Report, now products in all segments of non-alcoholic At the same time, Coca-Cola has commit- primary schools; in secondary schools, in which the highest savings can be at the highest level (A+) of the Global beverages – from soft drinks such as ted itself to responsible marketing and products from at least three beverage reached, for example through the use Reporting Initiative (GRI), and it also is- sports drinks, iced teas, juices, and juice sales and has this audited externally: We categories are offered, including one that of self-developed energy-saving modules, sued its declaration of conformity under spritzers to several types of water. For all respect the role of parents and the school is calorie-free; and vending machines which lower energy consumption for the German Sustainability Code. At the are designed in a brand-neutral manner. about 85,000 cooling facilities by up point of sale, the most important topics Coca-Cola has been represented to 30 percent. can be retrieved using the barcoo app, in Germany since 1929. Today Coca-Cola Germany also promotes active which permits access to independent in- more than 10,000 associates lifestyles on a day-to-day basis through The Energy Saver Program – developed formation on products via a smartphone, work at more than 60 locations “Mission Olympic – Wanted: Germany’s in conjunction with WWF – saves energy and through which the complete report in Germany – 24 of which are most active city,” which is an initia- during production; electricity for produc- can be obtained. production facilities. Coca-Cola tive for urban citizens to make private tion has been procured exclusively from offers more than 70 products in all commitments to engage in more physi- renewable energy sources since 2011. Sustainability messages are also increas- segments of non-alcoholic bever- cal activity. Coca-Cola has set itself the In the field of packaging, new techno- ingly included in brand communication. ages. A socio-economic impact goal of producing in a water-neutral logies are continuously saving material. Dialog with stakeholders has shown that study by the consultants Steward manner by 2020. With the Water Saver Coca-Cola has developed the PlantBottle™ these groups expect Coca-Cola to use the Redqueen showed that through the Program, developed together with WWF, and launched the first plastic bottle that strength of its brands to draw attention entire value chain of Coca-Cola in water consumption in the production consists partly of renewable resources. to social challenges, contribute to their Germany, a total economic output process is being continuously reduced. The long-term goal is to produce the solution, and hence motivate consumers of € 6.1 billion is generated directly Processed water is treated and fed back plastic bottles from 2020 onwards from to engage in a more sustainable lifestyle. and indirectly, € 2.9 billion is paid into the water circuit in such a way that PlantBottle™ bottles only, and hence save A survey conducted together with Die Ver- in taxes, and 119,000 jobs are it corresponds to natural conditions to on raw materials. With a recycled share braucher Initiative e.V. showed, moreover, protected. protect the fish. of more than 60 percent, Coca-Cola boasts that people associate sustainability today

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signed a long-term cooperation agree- up of employees with practical and con- opportunity of “physically producing

CHTIEF ment with the aim of jointly building struction site experience: Anybody from something themselves.” And it is not only O

H Community Involvement footbridges in structurally weak regions engineers to financial experts can apply the local volunteers who are motivated of Central and South America. These for a place on the team. It is only the key by seeing the bridge grow little by little bridges are an important part of the positions – involving construction or lo- every day: For HOCHTIEF, too, as the and Construction public infrastructure, as they provide gistics management, for example – that sponsor, it is of great advantage to see the local people with access to educa- require specialists. Ultimately, employees directly where and how funding is being tion, medical care, and markets. They from entirely disparate corporate units used and to know that it is going straight Expertise thus permanently create better living and professions end up working hand to where it is needed, with no detours. conditions and open up opportunities. in hand. Benefits for all involved Group-wide commitment In-house identification with the B2P By Ann-Kristin Brönnecke, HOCHTIEF projects is high. At Flatiron alone, since The collaboration between HOCHTIEF In the meantime, the entire HOCHTIEF this collaboration started the number of and Bridges to Prosperity has positive ef- Group is involved with B2P. Apart from employees who agree with the statement fects for all sides: The local communities For HOCHTIEF, bridge-building is a many-sided subject. It is both a core business and part Flatiron, HOCHTIEF’s other American “My employer’s community involvement benefit directly in the shape of an im- of our corporate vision – and it plays an important role in the international construction subsidiaries also work with the NGO, is good,” rose from 64 to 91 percent. proved infrastructure and, thanks to the and HOCHTIEF Europe’s collaboration For each project – including the first bridges, are strengthened for the future. group’s community involvement. Together with the organization Bridges to Prosperity and began in 2012. While the US subsidiaries HOCHTIEF project in 2012 – around 10 B2P can call on the construction group’s its own employees, the company is building footbridges in developing countries – with are focusing their efforts on projects in times as many volunteers applied than expertise and carry out its mission with tangible success. Latin America, HOCHTIEF is also active were required, despite the prospect of the funding that is made available. Fi- in Africa. To date, the collaboration has camping in the most basic conditions nally, with this collaboration HOCHTIEF resulted in seven bridges in Latin America and the physically challenging work. has found the ideal way of realizing its and one in Rwanda. Further projects are The comments from those chosen to take social responsibility: The company can Bridge-building is one of HOCHTIEF’s core borders and continents. Some of them – Since 2009 HOCHTIEF has been putting already being planned for the coming part are positive, with team spirit, the bring in its core competences, the inter- competences. During the 140 years of its such as the Öresund Bridge, or the bridge this part of its vision into very real prac- years. Two bridges in Rwanda and three chance of doing some good, and getting nal networking and motivation effect is corporate history, the construction group over the Bosporus – are world-famous. tice in the area of corporate responsibility. in Nicaragua are to be built in 2013 alone. to know different cultures making up for enormous, and every bridge built delivers has built many bridges all over the world. Moreover, our Corporate Vision states: At the time, HOCHTIEF’s US subsidiary, some of the physical pressures. Those clearly measurable results. HOCHTIEF Bridges connect people, span bodies of “We link people and organizations and Flatiron, and the nongovernmental or- The initiator, Flatiron, still has the great- employees who primarily work at a desk and B2P – all in all, a true community- water and gorges, and even cross national create new ways to think and act.” ganization Bridges to Prosperity (B2P) est level of involvement: In strategic are particularly enthusiastic about the involvement success story! partnership with B2P, the constructions experts developed the prototype of a suspension bridge that can be built any- where in the world in a similar form and with few means. Tangible development aid

Teamwork is central

HOCHTIEF’s involvement with B2P is Bridges to Prosperity was founded in 2001 with the aim of providing people in not restricted to the financing of bridge remote and structurally weak regions with access to education, medical care, projects and the provisioning of know- and markets through the construction of footbridges. While functioning infra- how to the NGO. A crucial advantage of structure is routine in industrial countries, in developing countries simply cross- this sponsorship is that the company’s ing a river to the neighboring community can often be a dangerous undertaking, employees can get involved directly as or involve detours of many kilometers. well. For each project HOCHTIEF seconds B2P uses the example of a project in Nepal to show just how great the impact a 10-member team to build the bridge on of such a bridge can be for the local people. Data prior to and after the bridge site, together with the local villagers and construction were compared: The number of pupils attending classes rose by B2P representatives. There, everybody 12 percent; medical facilities recorded a 25 percent increase in patients; and has to work hard: It often takes pure per capita income rose by 20 percent. muscle to deliver stones, cement, wood, and sand to the construction site, where In the 11 years since it was founded, B2P has built more than 100 bridges in they are then processed rapidly, using Africa, Central and South America, and Southeast Asia, eight of which were simple means. It is worth noting that built together with HOCHTIEF Group companies. the group of volunteers is not only made

142 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 143 Good Practice CSR Management MAN Customer Dialog Drives The MAN Group

Sustainable Product The MAN Group, headquartered in Munich, Germany, is one of Europe’s top commercial vehicle, Innovations engine, and mechanical engineer- ing companies. As a producer of trucks, buses, diesel engines, turbomachinery, and special gear units, in all our divisions we hold leading market positions. MAN’s By Yvonne Benkert, MAN core business activities shape pio- neering transportation and energy solutions that are both ecological Stakeholders present companies with very different challenges. The MAN Group responds and economical and meet the by inviting stakeholders to communicate their expectations and opinions. To this end, needs of customers and society. MAN conducts systemized surveys every year and discusses specific issues with selected The MAN Group employs some stakeholders. As customers represent a very important stakeholder group for MAN and 54,300 employees in more than also have a major influence on whether efficient products are used, they are central to 150 countries and includes the companies MAN Truck & Bus, our corporate responsibility activities. In 2012 we further intensified our dialog with MAN Latin America, MAN Diesel customers at the two leading trade fairs for our industry, IAA Commercial Vehicles and the & Turbo, and Renk. In 2012 the SMM maritime trade fair. Particularly quiet and with zero-emissions, the MAN Metropolis truck handles heavy-duty Company reported revenue of ap- urban roles such as trash collection. proximately € 15.8 billion.

As a global player in the field of trans- their requirements and expectations. In 2012 stakeholders again indicated marks for the fields of product respon- what MAN has achieved in the past year port-related engineering, MAN faces a Here the Company uses a variety of chan- Top five challen­- that resource conservation and climate sibility, environmental protection, and and what the Company is working on variety of very different expectations nels – from stakeholder and customer ges for MAN change are the two greatest challenges corporate governance. Participants said at present. from its stakeholders. Taking these into surveys to a presence at international facing MAN. They rated climate change they would like the Company to show account builds trust and acceptance. trade fairs and joint research projects six percent higher than in the previous more initiative in terms of social re- Customer dialog at international 1. Resource conservation The Company is therefore guided by with universities. year (see graphic). Stakeholders’ aware- sponsibility and corporate citizenship as trade fairs (74 percent) the expectations and opinions of those ness of diversity and equal opportunity well as human rights and responsibility stakeholders with whom it maintains a 2012 Stakeholder Survey 2. Climate change issues has shown a strong increase – toward its employees. However, more Customers form a large and important close relationship: customers and em- (67 percent) they are therefore considered the third- than three-quarters of the stakeholders stakeholder group for MAN. They decide ployees; suppliers and other business Since 2010 MAN has conducted and largest challenge for MAN. The issue of found that MAN’s approach to sustain- which trucks make up vehicle fleets, partners; analysts and investors; sci- continuously expanded an annual inter- 3. Diversity and equal opportunity globalization was rated about the same able business practices is credible. “The which turbines are used to generate ence and government; municipalities; national web-based stakeholder survey (42 percent) as in the previous year. According to the ratings given by our stakeholders are a power, and which engines propel ships. and NGOs. They give MAN important which delivers detailed insights into stakeholders, the subject of urbaniza- valuable instrument that allow us to At trade fairs, the Company informs input for its corporate responsibility (CR) stakeholder expectations. Responses in 4. Globalization tion and megacities is also relevant to regularly adapt our CR activities to shift- customers about the products and solu- strategy, helping identify opportunities 2012 showed that the more success- (40 percent) MAN, because in its role as a supplier of ing challenges,” says Jochen Schumm, tions it is offering in these fields – and and risks, align products with customer ful MAN’s CR activities are, the higher 5. Urbanization and megacities transportation solutions, the Company Chief Human Resources Officer of MAN explains which ones are particularly ef- needs, and harmonize business processes stakeholder expectations become. Of the (36 percent) can make a major contribution here. SE and MAN Truck & Bus. The results ficient and environmentally compatible. with the interests of society. approximately 600 stakeholders selected, of the annual surveys feed into MAN’s The employees who represent MAN at around 40 percent took part in the survey. Source: MAN 2012 Stakeholder Survey. The vast majority of the stakeholders existing materiality analysis, from which these events learn through face-to-face MAN conducts an intensive dialog with One-third of the participants were from The arrows indicate how the issue was rated MAN’s overall CR performance the CR Roadmap takes its lead. The conversations and from written question- its stakeholders to exchange information Germany, followed by China (19 percent) rated in comparison to the previous year. between adequate and above average. Roadmap not only includes concrete naires what requirements and challenges and ideas and proactively learn about and India (9 percent). The Company received especially good targets extending to 2015, but also shows their customers are facing.

144 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 145 Good Practice CSR Management MAN

World premieres at IAA Commercial were interested in solutions that promise innovations already meet these require- 2000 levels. MAN Diesel & Turbo has analyzing global trends in urban traffic. Pictures from left to right: Vehicles fair significant improvements in efficiency. ments today. These include the G-type developed an integrated gas strategy for Researchers are first defining the status two-stroke engines, which by decreasing its customers called “Bluefire,” bringing quo of mobility, then studying how it will The streamlined MAN Concept S truck Held every two years in Hanover, Ger- Growing demand for low-emission the speed of a vessel – an approach together gas technologies that represent look in the future and what role the differ- with the AeroLiner semitrailer from many, the IAA Commercial Vehicles fair is marine engines known as “slow streaming” – cut the efficient alternatives for energy produc- ent modes of transportation will play. The trailer manufacturer Krone. the most important innovation and trend ship’s fuel consumption. tion: gas engines for power plants, dual- goal is also to find out how the issues of forum for commercial vehicle manufac- In 2012 MAN Diesel & Turbo present- fuel engines which can run on either climate change and noise emissions will The MAN Truck & Bus stand at the IAA turers. In 2012 MAN presented a total of ed its products at SMM (shipbuilding, A dual-fuel large-bore diesel engine was gas or diesel in stationary and maritime impact on cities’ future mobility planning. Commercial Vehicles fair in Hanover. twelve innovations from the truck, bus, machinery, and marine technology), the highlight on the MAN stand at the applications, and industrial gas turbines. engine, and service sectors. The crowd- the world’s largest maritime trade fair, SMM fair, where it was displayed as part The study is being conducted against the Traffic in São Paulo, Brazil, one of the puller and most-photographed vehicle which was held in Hamburg, Germany. of a 14-meter-long drivetrain consisting Stricter emission standards and climb- backdrop of the megatrend urbanization, cities whose transportation system at this key fair was the Concept S proto- At this event, too, customer interest was of engine, clutch, transmission, and ing fuel prices are leading customers to which is characterized by sharp popu- is being analyzed in the “What Cities type truck. The streamlined semitrailer focused on boosting efficiency – not propeller. The engine can be run on oil demand solutions that are more envi- lation growth in cities. This is leading Want” study. combination – featuring an especially least because starting in 2013, all newly or natural gas. In gas mode it already ronmentally compatible and at the same to new requirement profiles. Growing aerodynamic semitrailer manufactured built ships must meet the criteria of the meets the IMO’s Tier III emission stand- time more economical. “Our dual-fuel numbers of people are traveling within by Krone – has the same load volume International Maritime Organization’s ards, which will become mandatory for and gas engines are optimally designed and between cities. Inhabitants must as a conventional truck but an extremely (IMO) Energy Efficiency Design Index international maritime shipping in 2016. to meet these requirements,” emphasizes be supplied with food and consumer low drag coefficient at the level of a pas- (EEDI). This states how many grams of In certain coastal areas, the standards Dr. René Umlauft, Chief Executive Officer goods; the waste they generate must be

senger car. This leads to a drop in fuel CO2 a ship may emit per ton of cargo and require an 80 percent reduction in emis- of MAN Diesel & Turbo and member of removed. As MAN helps design infra- consumption of up to 25 percent and nautical mile. MAN’s emission-reducing sions of oxides of nitrogen compared to the MAN SE Executive Board. “We must, structure solutions in line with these thus to a corresponding reduction in however, keep listening to our customers trends, the Company will build on the compatible technologies the preferred

CO2 emissions. Zero local emissions and so we can understand what their needs key foundation provided by the joint products of its customers. And MAN particularly quiet operation in all-electric will be in the future – this is the only study with TUM. “Only if we have an also wants to get to know its customers’ mode are characteristics of the MAN way we can stay ahead of the game.” in-depth knowledge of future trends can future environmental and efficiency Metropolis truck. Its lithium-ion battery Customer survey at 2012 IAA Commercial we develop products today that will meet requirements, so as to work with them is simply plugged into an electric socket Vehicles Studying the future of urban society’s needs tomorrow,” explains Dr. to develop the right solutions. Ongoing for recharging. A car diesel engine serves mobility Kirsten Broecheler, who is heading up dialog with customers lays the founda- as a range extender, providing security the project for MAN. The results of the tion for the Company’s success – today for longer distances. Aiming to better understand future ur- study are expected in 2013. and tomorrow. In keeping with this prior- More than 70 percent of our customers call for environmentally compatible and ban mobility requirements, Technische ity, which is firmly anchored in MAN’s MAN also premiered its new, Euro VI- resource-efficient solutions. They are also willing to pay more for such prod- Universität München (TUM – Technical Dialog with customers – for today corporate culture, the Company became compliant TG family of trucks as well ucts. This was shown in a survey of 276 truck customers and 79 bus customers University of Munich) is currently working and tomorrow a participant of the UN Global Compact as its NEOPLAN Jetliner buses and MAN conducted at the IAA Commercial Vehicles fair in September 2012. In addition, on a study commissioned by MAN called in December 2010. MAN thereby made a Lion’s Coach EfficientLine at the trade fair. 97 percent of participants believed that MAN is responding to climate change “What Cities Want”. The study is examin- MAN’s stakeholder dialog on products comprehensive commitment to support- These vehicles also drew tens of thousands responsibly and developing appropriate solutions. ing 15 cities on five continents – from has two objectives. The Company is aim- ing and implementing all Ten Principles of visitors to the Company’s stand who Shanghai to London to Los Angeles – and ing to make existing environmentally of the Global Compact.

146 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 147 Good Practice CSR Management o h ic R Managing CSR Across Concept of a sustainable society: The Comet Circle ™ Boundaries Parts Materials Fossil and mineral resources etc. manu- manu- Materials Product facturer facturer supplier manu- facturer

Sales Reuse of parts company By Andrew Lofts, Ricoh Reuse of products User of recycling Closed loop materials Long use materials Generation of raw materials recycling Open loop Oil • Chemical recycling Product Parts Materials recovery • Metals recycling materials company, Maintenance recovery recovery recovery From the very beginning, Ricoh has been energized by combining innovative products and User company recycling smelting center center company company Metals services with a sustainable approach to business. The company’s founder, Kiyoshi Ichimura,

nurtured a unique pool of thinkers who envisioned a world where business, society, and the Dissambly oil Thermal energy Energy recovery collection (Energy, CO2) Collection Sorting and disassembly company planet are interconnected. As a group, we have a regional framework whereby we connect center Recycling to the collective imagination and creativity of all our people, which ensures alignment center Final Shredder disposal company company across all regions. To support Ricoh’s goals and meet social expectations, accurately and Shredder dust

promptly, the Ricoh Group actively introduces internationally-established CSR frameworks Crushing of products Landfill throughout its supply chain. © 1994 RICOH

To facilitate this commitment and of Ricoh’s founder. Currently Ricoh is social initiatives and activities. It proac- the Education Support Program in the community residents to share informa- For the seventh year, Ricoh has sup- growth, we are working to make so- reviewing the use of ISO 26000 and tively involves its individual employees Medak District in Andhra Pradesh State, tion effectively. At the same time, with ported the annual United Nations World cial and environmental contributions its operating companies in Europe are in these activities through corporate situated in the south of India, and has the aim of improving the educational Environment Day to raise awareness of toward the sustainable development of now evaluating how best to use this programs and regional employee-volun- been working together with Save the environment in the target area, Ricoh its commitment to reducing its environ- society. With globalization expanding framework to deliver more value to teering schemes. It expects that each of Children to help improve local educa- is conducting educational activities, mental impacts and to encourage positive and deepening in recent years, issues all stakeholders. these activities will increase awareness tion conditions. Ricoh employees visited for instance, hosting seminars for the change among employees, suppliers, facing society are becoming increasingly of social issues and help employees to the area, where they conducted a field school management committee and and customers. complicated and diversified. In tandem Ricoh has a wide stakeholder group that understand how they can contribute survey and interviewed school faculty, organizing “children's groups.” with this social change come increasing is involved on a global basis. It reviews to solving such issues by encouraging educational bureau staff, parents, and By linking its environmental commit- changes in the business environment. In the CSR activities of its partner com- them to take action. In 2012 a Global children, through which various issues Putting good intention into ment to forward-thinking business this situation, corporations are expected panies and key members of its global Social Policy was launched, which covers were identified. Among the several is- practice: environmental issues strategies, Ricoh promotes development to make meaningful contributions to- supply chain against international CSR three themes: sues listed, the study pointed out that that is profitable and sustainable at cus- ward overcoming multiple social issues frameworks and makes continuous im- most schools did not have any printing For the Ricoh Group to become the type tomer sites as well as its own operations. while also creating economic value. provements through a self-assessment • Global Environment Conservation machines or duplicators, which meant of organization it envisions, not only Ricoh's services include supporting process. As it pursues business growth • Community Development that teachers did not have any means does the Group need to realize change the migration from paper to electronic Ricoh was one of the first companies to while simultaneously helping to sup- • Raising the Next Generation to print tests and teaching materials toward the creation of a sustainable invoicing, realizing savings of up to become a participant to the UN Global port the development of society, Ricoh and that communities could not share society, but society as a whole also needs 90 percent and through the Sustain- Compact in 2002 and the first corpora- recognizes the need to do more than just Putting good intention into information effectively. to realize such change. In 1994, Ricoh ability Optimisation program, which

tion in Japan to establish a dedicated respond to constantly changing environ- practice: social issues established the Comet Circle as the basis typically reduces CO2 by 33 percent. Corporate Social Responsibility division ments and to the needs of society. Ricoh To address this issue, Ricoh implement- to encourage such change. The Comet in 2003, within Ricoh Europe, the CSR believes it is necessary to work as a mem- In its value-creating CSR activities that ed a program to donate digital duplica- Circle expresses the greater picture of its Ricoh continually reviews sustainability Office was formed in 2006. The division ber of society to create new value that revolve around local communities, the tors to local schools and educational environmental-impact-reduction scheme, requirements on a people, plant, and produced the Ricoh CSR Charter and will facilitate sustainable social growth Ricoh Group provides its products, ser- institutions. Training is provided to which includes not only the scope of the profits basis. Ricoh takes the lead in its Ricoh Code of Conduct, which was and to address various challenges facing vices, and human resources for the children, teachers, and officials of lo- Ricoh Group as a manufacturer and sales industry to ensure that all stakeholders based on the principles defined in the society. With this understanding, it is purpose of contributing to the resolu- cal governments on how to use the company, but also the entire lifecycle of are fully informed and have the oppor- UN Global Compact. It also incorpo- proactively cooperating with a variety of tion of social problems in developing machines for the purposes of improv- its products, including upstream and tunity to work in a collaborative way to rated the principles and philosophies stakeholders globally in implementing countries. In 2011, Ricoh launched ing the quality of classes and helping downstream of its business activities. achieve the needs of all.

148 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 149 Good Practice CSR Management

of four children in the United States Traffic education as a publicity magnet – Increased Road Safety – are not buckled in correctly: a statistic Volkswagen commitment in China that can prove fatal in the event of an lkswagen accident. Volkswagen of America is us- Vo ing the “SitSafe” program to train their All over the World customers in the correct use of child safety seats and seatbelts.

Volkswagen produces vehicles of the highest quality and reliability, resulting in the highest At Volkswagen, traffic safety is not lim- ited to passenger cars. The Group is also level of safety for customers. But closing a sale is not the end of our responsibilities. On the involved with safety in the area of com- contrary, whether our customers are in Mumbai, Beijing, or Wolfsburg, we provide them with mercial vehicles and offers specific traffic targeted training to help them feel safe while driving. The worrying figures in international and loading safety training. This is what Scania has based its worldwide competi- accident statistics, especially from emerging economies, have led us to respond in this manner. tion “Young European Truck Driver” on The Volkswagen Group is actively engaging with various traffic-training programs tailored and receives support from the European to the individual markets – our motto is: “Every traffic-related death is one too many.” The Commission and the International Road Transport Union for its efforts. Partici- Group includes the German market in these efforts, of course. The Autostadt in Wolfsburg – pants not only learn something about which offers a world of experience in these matters as well as a communication platform for traffic safety but also train to make their all things to do with mobility – has a “Learn Park” for children 5 to 11 years old and offers driving style more fuel-efficient and environmentally friendly. them the chance to obtain a “child driver’s license.” Meanwhile, in the “safety training track,” parents experience first-hand that a cautious driving style not only increases safety but is also Even beyond our production sites, our Each year there are 90,000 deaths on sured that Chinese road safety education good for the environment. importers are busy working on increased the roads in China – that is 7.5 percent is enjoyable to watch and has a lasting traffic safety, for example the Turkish of all road deaths around the world: the effect. The series started in 2008 and is Volkswagen importer Dogus-Otomotiv, darker side of China’s automotive boom. broadcast primarily by television stations By Julia Glogowski, Volkswagen whose program “Traffic Is Life” raises As it is the most successful automotive in the east of China and in the large cities awareness among Turkish drivers about producer in China, Volkswagen has ac- of Beijing, Shanghai, Guangzhou, and safety in traffic. This includes an adver- knowledged its responsibility and has Dalian, where there are large populations It is the youngest on the road who war- tisement campaign that receives a lot of revived a classic solution from German and a high number of passenger vehicles. rant our attention – A common image attention as well as exhibitions, concerts, road safety. The traffic education series The employees of Volkswagen Group is of a child running after a ball onto the and even rap festivals. The importer is “The Seventh Sense” once served to raise China have often been invited behind road, and maybe even in front of a car. even working closely with the Turkish awareness among Germans about road the scenes of the series with the aim of Working together with schools, clubs, government to improve traffic safety. safety issues. It is now experiencing a raising awareness about traffic safety. The and public services, the various Group successful comeback in China with the extravagant television castings have also brands are providing different measures As the examples in Turkey and Argentina title “Drive Safely, Drive the Volkswagen become a true television spectacle. Child all over the world to help protect people. show, the Volkswagen Group is look- Way” – 40 episodes of this series have actors have been selected from among the Approximately 100,000 children at the ing to contribute toward traffic safety been shown to date and they are enor- sons and daughters of employees. Cordoba and Pacheco sites have been by keeping their customers aware – mously popular in China. trained in the ABCs of how to behave in not only about the safety equipment Volkswagen is continuously offering its traffic using the role-playing as well as fitted into their vehicles, but also on Why the seatbelt is so important; what to Chinese employees regular training pro- the successful traffic education project how their own behavior can increase do when an accident has occurred; and grams on traffic safety using alternative “Juegoteca Volkswagen de Seguridad Vial,” traffic safety. why you should pay special attention to media. The “Family Day for Traffic Safety developed by Volkswagen Argentina more vulnerable road users are among Among Children” is just one example. In together with local schools. the key issues presented to the audience. addition, Volkswagen dealers in China Particularly noteworthy is that the epi- offer their customers practical safety train- Some sites are also campaign for more sodes are not only very entertaining but ing using professional driving instructors. safety on roads leading to schools, which also very educational. The series came “By engaging so extensively, Volkswagen are particularly problematic, as well as into being by working closely with traffic AG is taking responsibility for society investing in play areas and the improve- experts from the Tongji and Jilin univer- and is contributing toward sustainable ment of pedestrian crossings. But what sities. Interviews with psychologists, use development in China,” says Dr. Zhang use are the ABCs to children if adults of case studies, and also appearances by Suixin, Vice President of the Volkswagen have not learned the basics? Three out prominent local television stars have en- Group China.

150 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 151 Good Practice Development

peinca Personal and Professional Sustainable Project in l | Co o s o Development of Women in “27 de Octubre” Community amp C Agribusiness of Chimbote

By Francesca Carnesella, Camposol By Francesca Carnesella, Copeinca

According to figures from the Food and Therefore, one of the main themes of in agriculture and society. We have de- By mid-2011, COPEINCA made contact this plan, needs and interests were con- The progress of these projects is the just Agriculture Organization of the United our sustainability strategy is to focus on veloped strategic alliances with public with the Stromme Foundation and the sidered and prioritized. After establishing the beginning of many successful future Nations, of the economically active popu- women and pay special attention to them and private institutions to ensure that NGO Tierra de Niños with the aim of benchmarks and indicators to measure activities for this prosperous community – lation in Peru, 24 percent of all workers in order to provide the best working con- this program has a greater impact as it evaluating sustainability projects with each project, they voted, validated, and and COPEINCA is proud to be able to are in the agriculture sector – one-third ditions. We do this through the program focuses on the regions of La Libertad and surrounding communities. The com- chose to work in the following: support them. of whom are women. Agri-business has “Women in Agriculture,” which includes Piura, located in northern Peru where pany wanted to contribute toward the an extensive labor reserve that employs the implementation of a set of programs CAMPOSOL operates. The program covers development of the surrounding fami- thousands of men and women in decent aimed at their welfare and development. topics such as obstetric psychoprophylaxis lies near the Chimbote industrial plant. work conditions and good pay guaran- This program is promoted by CAMPOSOL and prenatal stimulation to pregnant They began working together in order Workshop for the community held in COPEINCA’s auditorium teed by law, which allows for improve- in order to provide better working condi- women; training and career growth oppor- to define a meaningful strategy for the ment in their quality of life. CAMPOSOL tions and opportunities for all employees tunities; the Wawa Wasi (nursery) Rayito future of the “27 de Octubre” residents. generates more than 13,000 jobs, of and more professional development for de Sol; the program “Useful Vacations” which approximately 40 percent are held their partners and for women from the for employees’ children; healthcare and In order to establish appropriate lines of by women, thus creating an opportunity community, thereby contributing to the entrepreneurship programs in CAMPOSOL action, they proposed the development of to improve their quality of life. socioeconomic development of women communities, among others. a Participatory Social Diagnosis in order to promote dialogue with key commu- nity groups to identify and analyze their problems, needs, practices, knowledge, feelings, attitudes, and perceptions re- garding development issues. With these diagnosis outcomes, we shared the infor- mation with the community to set the path for the prioritization of activities. Project Status Comments To ensure that development plans were Two attorneys are working articulated with the community, we Technical support for In progress to identify and obtain sanitary decided to support them in developing obtaining legal titles approval of the properties Casilda Calsina Yunganina began her their Local Development Plan, linking Legal technical support to career in CAMPOSOL as a worker at it with the District Development Plan implement drainage projects Done Was submitted to the community the piquillo pepper plant. She currently and Regional so they could align na- holds the position of Head of Piquillo tional policies and budgets and the “27 Building a recreational Recreational space that allows Pepper Production in CAMPOSOL and de Octubre” community could be in- Done healthy recreation. Inaugurated family park on October 27, 2012 is studying industrial engineering at cluded formally in local priorities. We the Universidad Privada del Norte also designed a training plan to develop Starting Allow access control, trailers from Trujillo. “I feel comfortable and sustainable social management skills and Implementing a security gate and evil perpetrators to avoid 2013 accidents and thefts Margarita Gabriel Sanchez has been a beneficiary of the nursery Rayito de Sol. “My child, happy working in CAMPOSOL because leadership in the leaders and people of Jefferson, has attended the Wawa Wasi since he was 10 months old. I know that he is well-cared it has helped me progress as a working the community – in 2012 more than 10 Starting Training and implementation for and he has gained weight because he is now eating healthy food. I feel relief and happy to professional, and now they support and working sessions were held in order to Healthy Homes Project of improvements in practices 2013 and customs of the community leave my son there while I am at work, because he is well-attended to and in good hands.” encourage me with my studies.” strengthen the bond with them. Within

152 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 153 Good Practice Development OO P C Coop: Offsetting Projects Are Better Top-flight Compensation Than Their Image Projects: The Climate, There are two main points that have to be fulfilled for Coop in order to reach

the maximum level with its CO2 offsetting projects: Firstly, the projects have People, and Animals All to be recognized development projects and, if possible, related to the supply chain for Coop’s products – and they should help those people most affected by climate change. This often means the small-scale farmers who do not have the resources to deal with the consequences. Specifically, the projects are Benefit of the Himalayas in India, Nepal, and developed by the WWF and correspond to the global Gold Standard. In a state- Bhutan. In this region, many people ment, the WWF explains that this standard imposes strict conditions in terms still rely on wood as their main fuel. The of sustainability and sets the highest ethical requirements. Overall, Coop offset pressure on the forests is therefore huge. more than 80,000 tons of CO2 equivalent in accordance with the strictest By Thomas Compagno, Coop But the Terai region also has the world’s standards in 2012. Examples follow: highest density of tigers. It is estimated • In Madagascar, open fires are being replaced with solar-powered stoves. that there are around 16 animals per 100 This helps to counter deforestation of rainforests and other forests. There are Offsetting CO emissions is a good thing – but there is still a hint of a “sale of indulgences.” sq km. But because their habitat is being 2 13,000 solar-powered and low-energy stoves per year that are replacing 7,800 reduced as a result of deforestation for Coop has found a solution: The Swiss retailer only invests in development projects that are tons of wood. Each stove saves 2 - 3 tons of CO per year. agriculture, settlements, and fuel, con- 2 either developed by the WWF according to the Gold Standard or which are supported by flicts are inevitable. At least for Khasti, • In Kenya’s Lake Naivasha region, open fires are being replaced with more the WWF. They stand for maximum quality. these are now a thing of the past. efficient stoves. This also works to counter deforestation and also relieves people of the need to gather wood, which requires them to walk for long Thanks to the biogas plant, the fam- distances. In addition, it reduces the effects of smoke inside their houses. ily’s safety and health has improved. • In southern China, new and highly efficient stoves are replacing conventional Khasti Devi, a farmer from the village ily alone has reduced its CO2 emissions The small village of Mankanthpur, where “The kitchen and all the pans used to be cookers. The new stoves result in about half the quantity of wood being saved, of Mankanthpur in northern India, is by around four tons per year, thanks to Khasti lives, is in northern India, half an black with soot, the air in the house was with 1,600 stoves eliminating 16,000 tons of CO2. The quality of air in the happy. She has a new kitchen. But she the biogas plant. This corresponds to the hour to the east of the Corbett National permanently smoky,” she says. Everyone houses also improves. is not pleased because she has conveni- average annual output of a car, that is, Park in the Terai region. The fertile 800 used to suffer from tears in their eyes and • In the Terai region of Nepal, people are relying on biogas plants. The techno- ences such as a dishwasher, refrigerator, around 15,000 km traveled. km-long valley stretches along the south chronic coughs. Smoke in living quarters logy is simple and reliable. Fermentation of manure produces heat for cook- and steamer. Khasti has a new oven that is one of the most frequent causes of ing and valuable fertilizer. runs on biogas instead of wood. The fam- death in many developing countries – ily uses a new biogas plant to produce almost half the world’s population still • Biogas facilities are also being built in the Terai region of India. They reduce the biogas from the manure of its two cooks on an open fire or with primitive pressure on forests, as people no longer need to gather wood for fuel. There cows. This was not cheap: The family stoves. According to the organization are thus fewer conflicts between people and tigers. The negative effects of contributed 40 percent of the total cost Global Alliance for Clean Cookstoves, a smoke in houses can be virtually eliminated. of around 400 Swiss francs. They had to person dies from the consequences of spend 17 francs on a compost site. The this toxicity every 16 seconds. Today, the rest of the money – amounting to just walls in Khasti’s house are bright, and over 200 francs – comes from carbon- the air is clean. “And cooking is much offsetting compensation from Coop. easier,” she says while pouring tea for have to deal with dangerous conditions Depending on the availability of prey, a her guests. It takes just a few minutes is one of the goals of the WWF in the tiger’s territory can stretch over 30 - 50 The retailer uses biogas plants such as to heat the water on the new gas stove. Terai region of India. But it is far from sq km. “If fewer people enter the forest, this to offset part of the emissions caused the only one. “If conflicts between people that’s better for the tiger,” says Kandpal. by flying-in fresh produce. Coop and the Devi says that it is easy to use the biogas and animals can be avoided, nature also WWF intend to build several thousand plant. She places 25 kg of manure and benefits,” says K. D. Kandpal, a repre- For Khasti Devi and her family, the facil- biogas plants in India. The WWF has about the same quantity of water into sentative of the WWF in India. One of ity is certainly a blessing. Now that she already successfully implemented similar the fermenter. Fermentation produces the WWF’s goals is to double the tiger no longer needs to enter the forest she projects for Coop in Nepal. This helps methane gas in the tank, which can be population worldwide in the next 10 has time for other things. “Now I have families and the climate, as a family uses used for cooking. The residue is ejected years: 100 years ago, the world’s tiger more time to work our land, and look around 25 kg of wood for fuel each day. by pressure in the tank. This is a valu- population was put at around 100,000; after the children and the house.” Her

The forest – as a valuable CO2 storage able, non-odorous fertilizer. Producing they now number around 4,000, of which smiling face shows that her life really facility – is also protected. The Devi fam- plants like this so that people no longer 1,700 live in India. But tigers need space. has improved.

154 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 155 Good Practice Development

ch u India accounts for nearly 70 percent of o

t “Companies such as ITOCHU and kurkku demonstrate the potential of innovative I total world production of organic cotton, Pre Organic Cotton business partnerships to generate value for companies as well as communities. yet organically grown cotton accounts for This new commitment to the BCtA, the first in recent only 1 percent of all cotton cultivated in years by a company from Japan, supports environ- India. The issues confronting farmers mentally sustainable agriculture while at the same program: a Shift to provide the context for the low numbers time increasing income for farmers in India.” of farmers shifting to organic farming. Sahba Sobhani, Organic Farming Most cotton farmers could not wait the BCtA Acting Program Manager three years required for their farmland to be certified as organic and to receive financial and health benefits. During this period, farmers usually experience a 20 In September 2012, more than 150 delegates from corporations, international organizations, to 30 percent decrease in crop yields. In the program include (1) undertaking Contributing by connecting people governments, and NGOs around the world gathered at Business, The MDGs and Beyond – addition, they are unable to sell the or- purchase guarantees in volume before with the world ganically produced crops at higher prices seeding, (2) providing organic farming a forum run as a side event to the UN General Assembly in New York. ITOCHU Corporation due to the lack of certification. In addition education to farmers, and (3) helping So why is ITOCHU Corporation involved represented the Japanese corporations that are members of the UNDP-led Business Call to to lost revenue, the certification process farmers to get their land certified. This with the Pre Organic Cotton Program? Action (BCtA) and spearheaded a panel at the first session, “Innovative Business Models for requires additional fees that are prohibi- scheme reduces the economic burden Because it believes the program has the tive for many farmers. Thus, switching on farmers, since they no longer need to power to connect people, and because the Sustainable Development.” At the forum, ITOCHU presented the Pre Organic Cotton Program, to organic cotton cultivation is no easy purchase agrochemicals and pesticides. program brings happiness and positive an initiative of its Textile Company, which contributes to overall development in the cotton matter for those farmers who have been At present, more than 40 apparel brands sustainable changes for those involved – farming communities in India through poverty reduction and improvements in farmers’ farming conventionally for years. that are eco-friendly and conscious about from service providers to consumers product origin use Pre Organic Cotton around the world. health and the farming environment. From identifying issues to creating as the key material for cotton products initiatives such as clothing, towels, and bedding. Through this program, ITOCHU hopes that people become more aware of the Conventional cotton and organic cotton Commitment to the Business Call issues surrounding the poorest segments In 2007, managers at the Textile Company the needs and issues associated with the Issues confronting cotton farmers are well known to the world; however, to Action of the population. It believes that con- visited India, the world’s largest producer production of organic cotton, which was in India the transitional period to organic and sumers of Pre Organic Cotton products of organic cotton, to learn about local then developed into an innovative busi- the producers’ living situations during Today, the private sector is expected to will pay greater attention to the social farming of organic cotton. By visiting ness model not only for ITOCHU Corpo- Since the green revolution in the 1960s, that period is rarely recognized. In the have a substantial impact on the develop- issues surrounding the farmers in de- local farmers, they came to understand ration, but also for the textile industry. genetically modified seed, agrochemi- first few years of organic farming, cot- ment agenda of the UN through business. veloping countries. By increasing both cals, and pesticides have been used in ton production will usually be unstable, For example, it is possible to achieve sus- production and consumption of Pre Or- large quantities in India. It is said that because of the rapid change in farming tainable development through “inclusive ganic Cotton, ITOCHU hopes that more 45 percent of all agrochemicals con- methods. Also, transitional cotton will be business” by fairly engaging people in cotton farmers will switch to organic sumed in India are used for cotton farm- sold as conventional cotton, even when developing countries as producers and farming to improve living conditions and ing, yet cotton fields account for a mere it is produced using the organic method. business partners in the value chain. the natural environment. This is why it 5 percent of all farmland in India. The Recognizing this situation, ITOCHU real- continues to support the expansion of purchasing of chemicals and pesticides ized that drawing attention to this little- In August 2012, the Pre Organic Cot- the Pre Organic Cotton Program. poses an economically heavy burden on known reality has the potential to greatly ton Program was approved by the BCtA, impoverished cotton farmers. change awareness in the textile industry. which is led by the UNDP. The BCtA is a Unique to Japan, a general trading com- global initiative to encourage the private pany such as ITOCHU – with its multi- Moreover, since many of them are not As a solution for improving the living sector to develop innovative business faceted corporate activities in regions equipped with appropriate protective conditions of cotton farmers, ITOCHU models that achieve both commercial around the world and its extensive areas gear for handling chemicals on their Corporation conceived a system called success and sustainable development. of operations – has both the potential farms, skin and respiratory diseases the Pre Organic Cotton Program with It is organized by several international and the responsibility to contribute to are common. The safety of drinking kurkku, a company that promotes sus- organizations, including the UNDP. As a countries and society by connecting peo- water is also a concern, since farmers tainable lifestyles by selling eco-friendly part of its commitment to BCtA, ITOCHU ple and building bridges among different depend on wells near cotton fields where products. Initiated in 2008, this program pledged to improve the economic condi- segments. agrochemicals are used. For decades, puts value on the cotton that is grown tions, health, and farming environment of despite these negative impacts, it was without the use of agrochemicals or low-income farmers in India by increasing commonly used as the most efficient chemical pesticides during the tran- the number of participating farmers and By POC Program Team, way of farming. sition period. The main supports for fields in the Pre Organic Cotton Program. ITOCHU Corporation

156 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 157 Good Practice Development é

N estl Addressing Nutritional Challenges Through Micronutrient

Fortification Above: Selling iron-fortified Maggi cubes in Nigeria. Left: Teaching good culinary habits at scale in Côte d'Ivoire.

A number of global trends – including a growing world population, urbanization, rising incomes, and an increase in the number of people living beyond 60 years – have an impact on

nutritional habits and health. In many developing countries, people bear a “double burden” of women of child-bearing age in countries For instance, cassava, which is rich in vi- Nutrition education through malnutrition, with undernutrition (comprising protein-energy malnutrition and micronutrient where micronutrient deficiencies are tamin A, is being bred in Nigeria and Côte “cooking caravans” malnutrition) and overnutrition (overweight and obesity) occurring simultaneously. In general, most prevalent, and fortify the products d’Ivoire, whereas rice rich in iron and preferred by these vulnerable groups to zinc is being developed for Madagascar. We have supported the launch of all our people in lower-income groups around the world are at higher risk of suffering malnutrition address specific local needs. These will be integrated into future prod- fortified Maggi products with advertis- in any form. Dehydrated milk powders make uct lines as an alternative to fortification. ing and information campaigns that very good carriers of micronutrients and By sourcing conventionally bred staple promote their health benefits, their By Susan Steinhagen, Nestlé provide a way to get them to people on food crops that are bio-fortified, we hope affordability, and the benefits of com- a lower income without changing their to increase the quality of raw materials bining them with fresh, locally sourced existing eating habits. By the end of 2012, used in production while promoting the products. With 2,000+ global and local brands our global and local reach, which we perience in enhancing the nutritional our affordable milk ranges were available planting and consumption of plant foods We have gone on the road in Cen- and more than one billion products sold take pride in, brings both opportunities profiles of food products. Today, many in more than 80 countries, where they rich in vitamins and minerals by rural tral and West Africa to provide nutrition around the world every day, Nestlé has and responsibilities. Therefore, beyond of our products are fortified primarily are largely consumed by preschool chil- populations in developing countries. expertise and healthy eating tips to con- the ability and reach to make a positive complying with national laws, interna- with the “big four” micronutrients – dren. Our recent milk product launches sumers. Maggi brand “cooking caravans” impact on the health and nutrition of tional standards, and our own Nestlé iron, iodine, vitamin A, and zinc. We include Nido Dayem, an affordable, iron- Addressing micronutrient are traveling through Cameroon, Côte consumers on a large scale – by offering­ Corporate Business Principles (which are use information from local governments enriched milk launched in the Maghreb deficiencies in Nigeria d’Ivoire, and Nigeria, educating people the right kinds of products and helping based on the UN Global Compact’s Ten and international health authorities to region of northern Africa. We have a about balanced diets, micronutrient consumers make the right nutritional Principles), we are operating in ways that identify the different nutritional gaps in range of powdered and ready-to-drink To address iron and vitamin A deficien- deficiency, and the importance of cu- choices. help protect the environment for future diets. We then “renovate” our portfolio milks in the Philippines that are forti- cies in Nigeria, we have fortified our linary hygiene. The program also aims How do we aim to do that? We generations. Thus, our commitments by adding the relevant nutrients, focus- fied with essential micronutrients and affordably priced Golden Morn family to encourage cooking at home. have a fundamental conviction that for to sustainability and compliance form ing on popular foods. have also developed a range of affordable cereals with both these ingredients. More a company like ours to prosper, we must the foundations upon which we build fortified infant cereals to help bridge than 210 million servings of Golden Our long-term vision take a long-term view. Everything we do our actions to create shared value in Boosting nutritional content of the nutrition gap during the weaning Morn are consumed in Nigeria every should create shareholder value, and at our focus areas of nutrition, water, and affordable food period and beyond. year, so fortification gives families across This year, we made a commitment to the same time, our work must create rural development. the country the opportunity to increase improve the nutritional profiles of our value for society at large, because that is It is important that our fortified products Crops that help bridge the nutrient their nutritional intake every day at products to help reduce the risks of what ensures the long-term sustainabil- Focus on nutrition reach the people who need them most, so gap breakfast. We are also training farmers undernutrition through micronutrient ity of a company. We call this “creating they must be enjoyable, nutritious, and in Ghana and Nigeria who grow the corn fortification. We aim to lead industry shared value.” We aim to create shared value in the affordable. We market a growing num- We have launched a new research pro- used to make Golden Morn to follow efforts to help ensure that consumers area of nutrition by providing nutritious ber of “popularly positioned products” gram that seeks to use conventionally simple practices that reduce the risk everywhere have the right choices and Creating shared value products that deliver real health benefits – high-quality food products, ranging bred crops that are naturally rich in of damage from naturally occurring availability of products to be optimally to our consumers and by making our from culinary products to dairy, that micronutrients. This is done by cross- mycotoxins and increase yields, quality, nourished and, consequently, enjoy good We employ more than 339,000 people products more affordable and accessible provide nutritional value at prices to breeding varieties that are rich in mi- and consequently price. About 30,000 health and personal wellness. We have and have operations in almost every through innovation and partnerships. suit those on lower incomes. We prior- cronutrients with high-yield varieties to farmers have benefited from the project the capacity and, even more importantly, country in the world. We recognize that We have more than 140 years of ex- itize the needs of young children and produce high-yielding, nutritious crops. since its launch in 2009. the determination to do so.

158 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 159 Good Practice Development r u In this sense, the initiative stresses ongo- seg ing training. Therefore, the students that r o Piecitos Colorados – show the greatest skills are monitored P and then supported through a Prosegur Talent Scholarship, so that they can Educating to Develop continue to study and, thus, complete the program’s circle of aid: training professionals who will work for their Latin America communities in the future.

A project involving everyone

Piecitos Colorados would not have been able to evolve without the voluntary work of the whole Prosegur team. The link be- By Prosegur tween the workforce and Piecitos Colora- dos is established right from the start. The employees themselves are the ones who Piecitos Colorados is a Prosegur development cooperation project that seeks to improve the can propose candidate schools; are part comprehensive education and the quality of life of children living in disadvantaged areas of the duties and rights for both parties. teaching tools and materials. It is also the of the Selection Committees; cooperate Latin America where the Company is present. With an emphasis on a long-term sustainable Once the cooperation has been formal- period in which the students are encour- with the work teams; take part in the vol- ized, the intervention phase kicks off in aged to respect the environment and to unteer activities (painting walls, planting, approach, the program prioritizes the teachers, students, and their families being actively four progressive levels. access the new information technologies. and weeding vegetable gardens, building committed to transforming the schools and to turning them into the driving forces of their greenhouses, etc.); and suggest aspects to communities. Phase 1 – Infrastructures: Depending Phase 4 – Sports: This last phase tries improve the program through the website, on the state of each school, the emphasis to hearten the students to do sports and Intranet, or the specific Piecitos Colorados is on improving its facilities to provide foster their physical development, along inboxes. The President of Prosegur and a better environment for educational with highlighting the values of team its Fundación, Helena Revoredo, pointed By improving education and awareness- of the path – they were affectionately local resources, the aspiration is that development and appropriate health work, effort, and healthy competition. out: “We have been ambitious with the raising among the families and the com- referred to by their teachers as “piecitos the schools achieve higher levels of self- conditions. challenge and decided when defining an munities, as well as refurbishing the colorados” (little red feet). management and autonomy in the long The combination of all these measures intervention model, but we knew that schools, overhauling the basic servicies run by increasing their development Phase 2 – Nutritional Training: The has enabled significant advances to be we had the best instrument to drive it: and applying nutritional programs, the The Company – at a local level – de- opportunities. goal is to foster healthy eating habits detected, such as the reduction of school the people that are part of our Company.” project seeks to reduce the school drop- cided to support them by means of a and encourage better use of local re- absenteeism and greater teacher moti- out rate and to foster the development of school sponsorship process to rebuild In order to work in such different con- sources. In order to tackle this stage, a vation as well as progress in the self- A responsible Company the communities where it is established. their facilities. One year later, this spon- texts and countries without losing the strategic alliance has been set up with a management of the centers (vegetable Piecitos Colorados is managed by Fun- taneous and initial aid played a funda- essence of the project, Prosegur produced nongovernmental development organiza- gardens, greenhouses, and corrals) and Prosegur is aware of its responsibility dación Prosegur and is currently set up mental role in Fundación Prosegur’s an Internal Manual. It is followed by all tion (NGDO) specializing in this area – in the entrepreneurship spirit of the toward its customers, employees, and in seven countries (Argentina, Brazil, decision to take over the project, put it teams involved in Piecitos Colorados, Nutrición Sin Fronteras – based on ef- families (sewing and literacy workshops). shareholders and of its role in the devel- Colombia, Chile, Paraguay, Peru, and on a professional footing, and extend and, among other things, sets out the ficiency and innovation criteria, with a In short, great impetus has been given opment of the societies where it is present. Uruguay), where it benefits more than it to other countries of Latin America, main criteria for selecting a school that long-term sustainable approach. In that to developing the communities through The Company, a UN Global Compact 4,000 students from 30 schools in differ- with the conviction that education is may qualify for the program. Further- way, employees, parents, and teachers the schools. participant since 2002, is a partner and ent intervention phases. the best future guarantee for these more, the initiative has its own Business work together as a team to obtain the a member of the Spanish Network Steer- “piecitos.” Plan, subject to a quarterly reporting nutritional data of the students through ing Committee, which promotes the Ten The origins of the project date back to procedure, in order to administer the an information transmission human Principles that make up this initiative. 2006, when a group of Prosegur em- For a comprehensive education resources transparently and exercise chain. This means that experts do not ployees in Argentina discovered the dif- their effective control. need to be sent over from Spain, thus The social action of the Company is man- ficult situation of some rural schools in Piecitos Colorados, as a development obtaining a good cost-efficiency ratio aged through Fundación Prosegur, which the north of the country, with serious cooperation program, wants to be an Piecitos Colorados believes in establish- for the action. in 2012 expanded and consolidated its shortcomings in their infrastructures agent for change. Its comprehensive ing a strong link with each beneficiary projects, focused on the fields of educa- and basic services. They were located in approach means that it avoids one-off educational center. Therefore, once the Phase 3 – Educational Quality: With- tion, social and occupational integra- isolated zones and the students had to interventions to emphasize education school is selected, an Affiliation Agree- out interfering in the official education tion of disabled people, and corporate walk for miles to attend class, resulting in and cooperation. By developing human ment is entered into to guarantee a trans- set up by each local government, this volunteering, which benefit more than their feet being stained by the red earth capacities and improving the use of the parent intervention and to break down phase focuses on the overhauling of the 40,000 people on three continents.

160 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 161 Good Practice Development o fi

Finger prick to collect blood for screening test san WHO and Sanofi: A Public-Private Partnership to Save Lives

For Sanofi, as a global healthcare partner, improving access to healthcare for the most dis- advantaged patients is pivotal to its corporate social responsibility approach. At the core of this commitment is the long-term partnership with the World Health Organization (WHO) to Queuing for sleeping sickness screening test control a group of debilitating infectious diseases, called “neglected tropical diseases,” which affect mostly poor people in developing countries. Since the partnership began, in 2001, more than 20 million people in sub-Saharan Africa have been screened for sleeping sickness,

and more than 170,000 patients have received free treatment for what is a fatal disease, if Sleeping sickness: A neglected tropical Glossina insect, commonly known as the surveillance, diagnosis, and treatment left untreated. This partnership has put the elimination of sleeping sickness within reach – disease threatening millions of people tsetse fly. If left untreated, the parasites of the disease very challenging. In cer- a prospect that was unthinkable a decade ago. in Africa invade the central nervous system and tain areas, displacement of populations cause severe symptoms such as changes due to conflict is an additional factor More than one billion people worldwide in behavior, confusion, poor coordination, favoring transmission of the disease, in are at risk from – or are affected by – a and disturbance of the sleep cycle (which regions where health systems are weak group of infectious tropical diseases that gives the disease its name). Without treat- or non-existent. the international community considers ment, sleeping sickness is generally fatal. By Benedict Blayney and Pierre-Guillaume Harscouët, Sanofi to be “neglected diseases.” They are called A 1995 WHO Expert Committee esti- “neglected” because the people who are Sleeping sickness threatens millions of mated that 60 million people were at most affected by these diseases are often people in 36 countries in sub-Saharan risk, with an estimated 300,000 new the poorest populations, living in remote, Africa. Many of the affected populations cases per year in Africa, of which fewer rural areas, urban slums, and conflict live in remote areas with limited access than 30,000 cases were diagnosed and zones with poor living and hygiene to adequate health services, making treated. During epidemics, prevalence conditions. Neglected tropical diseases reached 50 percent in several villages in persist under conditions of poverty and the Democratic Republic of the Congo, are concentrated almost exclusively in Angola, and Southern Sudan. Sleeping the most disadvantaged populations in sickness was the first or second greatest developing countries. “Above all, this partnership shows cause of mortality in those communities, what is possible when a pharma- ahead of even HIV / AIDS. Without a strong political voice to address ceutical company wants to see its the issue, these tropical diseases will products make a difference in the A partnership born from a continue to have a low profile and a low lives of impoverished people living desperate situation status in public health priorities, even in remote places. In collaboration though they are endemic in 149 countries with WHO and national control Despite the efforts of WHO, the situation and territories. Their consequences range programs, multiple challenges – for sleeping sickness was becoming des- – depending on the disease – from blind- beyond the donation of drugs – have perate in 1999 when drugs to treat the ness, disfiguring scars and ulcers, severe been progressively tackled in ways disease were likely to be discontinued, pain, limb deformities, impaired mental that build sustainable capacity. and manufacturing to come to an end. and physical development, to death. The results speak for themselves.” However in 2000, discussions were initi- Dr. Pere Simarro, WHO, examining ated between WHO and Aventis, one of slides under the microscope Sleeping sickness (also known as human Dr. Margaret Chan, Director-General of the parent companies of Sanofi, which for sleeping sickness parasites African trypanosomiasis) is a parasitic dis- the World Health Organization manufactured three of the five drugs ease transmitted by the bite of an infected used to treat the disease (pentamidine,

162 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 163 Good Practice Development o fi

Mr. Christopher A. Viehbacher, CEO, Sanofi and san “The key to success in fighting these diseases is the need Dr. Robert Sebbag, Vice President, Access to Medicines, to address the multidimensional factors. What is the point Sanofi at Bodo sleeping sickness treatment center, Chad in a pharmaceutical company providing treatments, if there are insufficient resources on the ground to provide the healthcare that is needed, or if people are not aware of the symptoms, and cannot be correctly diagnosed and treated?

Since the beginning of our partnership, we have worked closely with WHO to identify the real needs of people. We have ensured that our commitment not only includes, but also goes beyond, donations of medicines. As a result of the resources we have committed, and the tremendous passion and dedication of the teams, WHO can ensure that trained staff, efficient screening and diagnosis, treatment, disease surveillance, and health education are available and made accessible to all patients.

Thanks to WHO’s leadership and the combined efforts of national control programs, academia, nongovernmental organizations, and pharmaceutical companies, we can look forward to the day when the word ‘neglected’ no longer Mobile team laboratory applies to tropical diseases. I would like to congratulate technician performing and commend all those involved in this endeavor.” screening blood test

Mr. Christopher A. Viehbacher, CEO, Sanofi Addressing inequalities in access to healthcare

A majority of the global population does not have access to adequate healthcare today. This is a complex issue, and respon- melarsoprol, and eflornithine) to find a logistics, and infrastructure. From 2001 Through public awareness, control, and sibility for tackling it lies with many different stakeholders: governments, the World Health Organization (WHO) and other solution to the problem of access to drugs. to 2012, Sanofi has provided $ 60 million surveillance programs implemented international organizations, NGOs, academia, pharmaceutical companies, and funders. As developers and manufacturers of in financial support and sleeping sick- in endemic countries, the number of life-saving products, pharmaceutical companies have a crucial role to play. Enabling individuals to assert their right to health On May 3, 2001, a landmark agreement ness drug supplies to WHO. new cases reported has also dropped means facilitating access to quality medicines and vaccines for as many patients as possible, whether they live in developing, was signed between WHO and Aventis, by some 72 percent – from more than emerging, or developed countries. initially for a five-year period. The objec- At the London declaration meeting on 25,000 in 2001 to less than 7,000 in 2011 tives of this agreement were to restore Neg­lected Tropical Diseases, held in (the estimated number of total cases is For Sanofi, access to healthcare is not only a matter of the patient having access to affordable medicines and vaccines, but control activities; to ensure systematic January 2012, in the presence of Dr. currently 30,000). These results have also of having the opportunity to benefit from disease prevention and to receive comprehensive care – from diagnosis through screening of sleeping sickness and avail- Margaret Chan, Director General of WHO, been achieved despite the complexity to treatment. Sanofi is committed to supporting governments’ and other stakeholders’ efforts to reducing the barriers to help ability of medicines; and to train staff in Sanofi pledged to provide sleeping sick- of the screening process required to all people access healthcare. For this reason, it has designed initiatives to address major public health priorities while sup- endemic countries. This agreement was ness medication until the disease was detect the parasite in remote areas of porting an economically viable business model that places patients and their needs at the center of its concerns. renewed by Sanofi in 2006 and 2011, eliminated. sub-Saharan Africa with little medical each time for another five years. From infrastructure (this process involves an 2006 onwards, the partnership with On the path to elimination antigen-antibody blood test followed, if WHO was extended to include other positive, by a lymph gland puncture, or neglected tropical diseases such as leish- The results speak for themselves. To blood film, to be reviewed by a skilled Treatment for late stage disease is com- nonprofit drug research and development effective, it will make treatment much maniasis, Chagas disease, Buruli ulcer, date more than 20 million people in technician under the microscope, and plex and poorly tolerated with several organization) to develop a promising new easier for patients. Sanofi and DNDi also and yaws. endemic areas have been screened for finally a lumbar puncture and analysis intravenous infusions per day. This is why oral treatment for sleeping sickness. This started in 2011 a three-year collaboration sleeping sickness, and more than 170,000 of the cerebral spinal fluid, should evi- Sanofi is also collaborating with the Drugs could potentially replace the current treat- agreement for research on new treatments Beyond drug donations, Sanofi provides patients have received treatment for dence of the parasite have been found for Neglected Diseases initiative (DNDi, ments, which are complex and difficult for eight other neglected tropical diseases WHO with funding to support training, what is a fatal disease, if left untreated. in the prior tests). a collaborative, patients’ needs-driven, to administer. If this new drug is safe and listed by the WHO.

164 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 165 Good Practice Development

Creating Homes – heinland

TÜV R Affordable Housing in India

By Katharina Riese and Svenja Wittkämper, TÜV Rheinland

In recent years there has been a large migration wave from India’s rural regions to the cities. Soon, 40 percent of the Indian population will be living in the country’s urban centers. Due to this fast growth and the large influx of people, cities are having trouble providing adequate living spaces, utilities, and facilities. More than 130 million people – equivalent to 40 to 60 percent of the urban population – are expected to be living in substandard housing. These low-income groups face a broken housing market that hinders them from living in an affordable and quality home.

Ashoka Innovators for the Public, an income urban population earning be- up a framework for a market-based priate and attainable housing with the a holistic evaluation of the lifecycle of a an estimated 25 million homes. Besides association of the world’s leading social tween $200 and $500 a month. From a solution. Whereas developers are in best quality-to-cost ratio. The standard building as well as the demands of its setting up a lucrative market for develop- entrepreneurs, and TÜV Rheinland, a financial point of view, these urbanites possession of a wide knowledge base provides consumers with a high level occupants. A set of criteria for each of ers, interaction between developers and global inspection, certification, train- would be able to afford a new home at about land acquisition, construction, of transparency, which allows them the focus fields is formulated with the the urban poor has been fostered and ing, and consulting company, are using market price in a well-functioning real design, financing, as well as legal and to make an informed decision. Besides help of subject experts. TÜV Rheinland has resulted in added value for all par- their joint competencies to facilitate the estate and financial market. Yet, the fiscal regulations, citizen sector organiza- empowering the low-income families, is relying on its 140 years of experience ticipants. For low-income families, the exchange between real estate developers reality is just the opposite. Low-income tions can provide valuable insights into the certification positively influences in developing and conducting certifica- project will lead to increased dignity and and the low-income population. The families are facing multiple barriers the needs and demands of the target their living conditions, as safety, sus- tions, to establish, for example, the pillar quality of life as well as to an improved mission of the joint project “Creating such as a faulty property rights system; group. By introducing new entrants to tainability, and accessibility to utilities concerning energy and environment. economic status. Homes – Affordable Housing in India” bureaucracy combined with corruption; the market, examples can be made, posi- are part of the eligibility criteria. For As project manager, TÜV Rheinland co- is “[to] create a rating system for afford- low-quality, expensive building materi- tive impacts demonstrated, the mindset developers, the rating system serves ordinates the realization of the rating In addition, the environment profits able housing that certifies sustainable, als; restricted distribution channels; and of the market changed, and the supply as a guideline to help create homes process, trains certifiers, and is in charge from installed energy-efficient tech- safe, and quality housing for BoP [bottom lack of financial and technical support. of affordable housing increased. In the that fit the needs of the target group. of awarding certifications to exemplary nology and resource-saving measures of the pyramid, referring to the poorest Factors such as irregular incomes and no end the synergy is beneficial for the Furthermore, the certification require- residential buildings. The result of these considered in the realization of the pro- socioeconomic group] customers.” provable financing or tax receipts deter businesses, communities, and custom- ments lead to optimized processes and concerted efforts is a rating system that ject. Ameliorating the lives of excluded the banking and housing industries from ers involved. reduced transaction costs. covers the length of the housing devel- members of society as well as applying The large influx of immigrants has left including informal sector workers and opment project – from the first plan- innovative environmental solutions go the cities in dire need of innovative city micro-entrepreneurs into the market. Besides the mere increase in housing To create appropriate quality housing, ning ideas to the time when the house hand in hand with the UN Global Com- planning measures and approaches to supply, the initiative focuses on amelio- the rating focuses on four areas: finance, becomes a home. pact Principles. By ensuring the initiative find appropriate housing. Due to the Alleviating these market inefficiencies – rating quality by developing a best prac- construction, energy and environment, is profitable, the sustainability of the large differences in monthly incomes – and thus improving the housing situa- tice standard. The project partners TÜV and community. The aim is to facilitate The cooperation between TÜV Rheinland project can be guaranteed over many which range from 3,300 INR (approx. tion for the mentioned income group – Rheinland and Ashoka are combining the access to financing options; to ensure and Ashoka is scheduled for a four-year years. Furthermore, the developed cer- $ 65) for the most vulnerable to 25,000 is the mission of Ashoka’s initiative their expertise to create a certification safe, qualitative, and legal construction; period, after which a profitable, afford- tification is easily transferable to other INR (approx. $ 500) for informal sector Housing For All. The civil sector, TÜV that sets a benchmark for quality hous- to consider resource-efficiency and the able housing market will have been cities within India as well as worldwide, workers and micro-entrepreneurs – Rheinland, as well as additional actors ing. With the help of this benchmark, carbon footprint of the new develop- created. According to market studies, for example to Colombia, Brazil, and there is no all-encompassing solution. from the private sector have combined real estate developers and low-income ment; and to meet the customers’ needs. the affordable housing market is worth Egypt, where comparable projects are The focus of this project is on the low- their complementary expertise to set families will receive guidance on appro- From different angles this view provides $500 billion, as India faces a shortage of being implemented.

166 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 167 Good Practice Financial Markets

ank risk categories to which AAIB is exposed. applicable to its banking activities. lowing guidelines for the Central Bank B This is addressed mainly through the fol- AAIB’s Compliance Function has access of Egypt, the Center for International

nal Corporate Governance: lowing functions under its supervision: to the Board Audit Committee, which Private Enterprise, and the Bank for o Credit Risk, Market Risk, Operational ensures the department’s neutrality International Settlement. “If you can- The Way to Sustainable Risk, and Policies and Procedures Unit. and independence. not comply, then you have to justify.” Internal Audit Furthermore, AAIB has created the po- nternati

I sition of Corporate Governance Advi- Finance AAIB has a centralized, independent sor to provide support to management Internal Audit function, which reports and the Board’s Corporate Governance Sustainable directly to the Board’s Audit Committee. Committee on the implementation of Finance in Egypt A frican The Division’s primary focus is on the best practices and the assessment of the following activities: overall governance framework. A rab

By Perihan Abdelghaly and Maha Hasebou, Arab African International Bank • assessing the effectiveness and adequa- Facing Changes and Challenges For development to be sustainable, cy of internal policies and procedures; it must not only seek profitability • reviewing the Bank’s financial report- Egypt’s revolution created instability but must address social justice; Arab African International Bank (AAIB) firmly believes that the road to impactful corporate ing; that threatened the security and flow equality; reduce – and eventu- governance entails values that achieve sustainable businesses as an end goal – AAIB seeks • conducting risk-based audits on the of operations in the country’s financial ally eliminate – poverty; preserve Bank’s branches and functions (includ- sector. As a corporation with effective natural resources; and remain to maintain the balance between economic growth, profitability, and environmental, social, ing other control functions) to evaluate / management mechanism, AAIB’s Board within the limits imposed by the and governance (ESG) concerns. validate the effectiveness of internal of Directors claimed the expansion of ecosystem. AAIB has partnered control systems within the Bank, as Corporate Governance Committees in with the United Nations Develop- well as to review the compliance of Egypt to include Risk and Information ment Programme to enhance the branches and functions with internal Technology Committees. All of AAIB’s competitiveness of the financial AAIB corporate governance goes beyond AAIB has in place an effective control Internal Committees and regulatory policies and guidelines; Corporate Governance Committees are sector in Egypt and to embrace the having effective controls in place. It is framework that properly monitors com- • following up on the implementation working according to the terms of ref- ESG agenda to establish sustain- about the voluntary adoption of govern- pliance and the transparent reporting In addition to the primary role assumed of corrective actions related to audit erence issued by the Board of Directors able growth. Sustainable finance ance practices, individual behavior, and of financial results, as well as assesses by the Bank’s control functions, risk findings. in 2011. The committees abide by the must contribute to the economic corporate culture. potential risks and proposes the appro- and control issues are also discussed by minimum requirements of the terms of growth of the countries. priate management thereof. The ap- the Bank’s internal committees, such Internal Control reference and reassess the terms every • Corporate governance is a living and plied control framework consists of the as the ALCO & Market Risk Manage- year. The committees are not limited to The objectives of the partnership dynamic framework: At AAIB the role following: ment, Operational Risk Management, The Internal Control Division is respon- senior officials and decision-makers but are: of internal control functions goes be- Retail Credit Risk, Risk and Control, to sible for ensuring that the established include all stakeholders. This inserts new • promoting awareness of yond monitoring and control to guid- Board of Directors and Board name a few. Internal committees are controls are complied with. In essence, blood into AAIB’s corporate culture and sustainable finance in Egypt; ance and consulting on risk aware- Committees responsible, among other things, for the Division is responsible for review- encourages the independence of various ness. ensuring that AAIB has appropriate ing the daily transactions on the Bank’s functions such as Compliance, Audit, • developing a national model for • Linking risk-management practices to The Board is assisted by its Audit, Risk, and current risk policies in place that ledgers to ensure their proper execution, Control, and Risk. inclusive banking, which in turn organizational performance: ensuring Corporate Governance, and Remu- address the major risks faced by the Bank. documentation, and compliance with enables the financial sector a that consistent risk-management and neration committees in performing its The committees’ recommendations are regulatory and internal regulations, poli- Juniors are observers: AAIB uses different strategy for offering financial compliance practices are in place with- oversight role on bank operations and presented to senior management and cies, and guidelines. Its role expands to approaches to surpass the traditional assistance to low-income out losing focus of long-term growth management. Board-level committees for review and the regular review of various functions corporate governance goals, whereby the families and individuals; and profitability. appropriateness. at the branch level. Corporate Governance Committees are • reducing and mitigating the • Being an early adopter of what the Bank Senior Management not limited to standard scenarios. This financial risks of big markets by considers to be best practice interna- Consolidated Risk Management Compliance Function means that the Corporate Governance distributing wealth and risks on tionally: where appropriate, by apply- Within the powers delegated to them, Function Committees are not limited to senior different market segmentations; ing before a legislation or regulatory senior management is responsible for en- The main role of AAIB’s Compliance management in the Bank but include directive is published. suring the implementation of an effective AAIB has a consolidated independent Function is to safeguard the Bank juniors from all functions to integrate • developing banking practices • Empowering staff members to come control framework and for setting the risk-management function with access against “compliance risk,” which is corporate governance from the whole that aim to have a positive forward and report any serious issues: tone for the AAIB’s risk culture, which to the Board through its Risk Commit- defined as the risk of legal or regula- bank. impact on people, profits, AAIB’s whistle-blowing policy is man- reflects the Bank’s attitude toward risk- tee. The Consolidated Risk Management tory sanctions, material financial loss, and the environment and aged by the Compliance “Department,” taking and risk management, as well as Group is mainly concerned with the or loss to reputation a bank may suffer Comply or justify: AAIB follows a strict encouraging ethical business whereby findings – if any – are repor- integrates risk awareness into the Bank’s identification, assessment, monitoring as a result of its failure to comply with policy to govern and control the institu- practices. ted to the Board’s Audit committee. daily operations. and control, and reporting of the main compliance laws, rules, and standards tion. All processes comply with the fol-

168 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 169 Good Practice Financial Markets o

Important advances in 2012 were made with the creation of a financial education radesc For a Financial Education strategy for the organization. This strat- B egy took into consideration the priority stakeholders and their characteristics Culture (employees, customers, and community) and the decision to utilize one language. The strategy went beyond communi- Bradesco is committed to its stakeholders’ financial cation and was applied to Bradesco’s sustainable inclusion and financial edu- education and believes in social transformation through cation strategies and models, so that all knowledge and awareness fostered by several actions. stakeholders could be aligned regarding social security, insurance, consumption and credit, investments, and citizenship.

By Tita Berton, Bradesco Another highlight was the launch of the Responsible Credit hotsite – open to customers and non-customers – and the inclusion of financial education content in network manager courses, with a view Bradesco knows the importance of edu- In 2008, the Bank began to conduct In 2011, a work group was created to to emphasizing the responsibilities of credit card expenses; and for understand- dactic, accessible content on financing cation and all its aspects. Accordingly, “Credit Municipal Meetings” in small focus on financial education and intensify each employee in guiding customers ing Bradesco Corretora’s operations and and related subjects in order to prepare with the mission of being recognized Brazilian towns. The lectures provided the Bank’s investments in training. That regarding their use of credit. tax calculations. For customers with a customers to make decision on how as the best and most efficient financial the people – most of whom had never same year, the number of people served University Account, the Bank offers on- to use and manage their money. Thus, institution in Brazil – and for promot- had contact with a financial institution by courses in personal finance, financial In 2013, the Portal de Educação Finan- line courses on financial education and much content is included on websites ing banking inclusion and sustainable before – with basic information. These mathematics, and Microsoft Office totaled ceira (Financial Education Portal) was other interesting themes. Another tool is and distributed as follows: development – it invests in the develop- meetings, which are still being provided 600,000 – double the 2010 figure. Since launched, which contains all of Bradesco’s the Responsible Credit hotsite that, in ad- ment of educational tools and spreading by the Bank, have reinforced even more the Bank began providing courses on its related actions. dition to offering services and guidelines, • Websites for individuals: Classic, ex- the content it produces by targeting each the concepts of responsible credit and home page in 2010, the course materials allows users to control their household clusive, prime of its stakeholders. personal finance. have been accessed over 900,000 times. Inside out budgets and better utilize their funds. • Websites for companies: Retail Content structure on websites for indi- In conjunction with guidance on the Certain stakeholders need special atten- viduals and companies: Financial Situ- responsible use of credit as well as prod- tion regarding financial education, such ation, My Revenues, My Expenses, My ucts and services offered to customers, as those in low-income communities. In Projects, Financial Products, Responsible Financial education activities for Bradesco’s stakeholders Bradesco’s financial education measures the cities of São Paulo and Rio de Janeiro, Credit, Useful Tools, Further Information, include internal training. Personal fi- the Bank conducted a number of lectures Keeping Up to Date with the Economy. nance courses and the newly launched for nearly a thousand people in 2011 and Employees Community, customers, universities, fairs Responsible Credit courses are provided created a specific booklet on personal • Click Conta (financial education for through the intranet’s training system, finance. The topics of financial education, children and teenagers) Lecture on Financial Education and Responsible Credit – Prime and Retail: Booklet – Take care of your money: named TreiNet, in addition to lecturers sustainability, and responsible credit Click Conta has produced a web series • 2012: 678 people • 6,305 copies delivered on financial education, onsite courses, were included in the Credit Municipal called Antenados, in which children play • 2013: 20,000 people (estimate) and training for managers. Meetings’ scope and objectives. in the role of two brothers who discuss subjects that are based on certain situa- Lecture on Personal Finance – Departments and Affiliates: Lecture on Personal Finance: Through trained staff, the financial In the first quarter of 2013, a video train- tions and give tips on financial education. • 2012: 1,567 people • 2010 to 2012: 10,184 people knowledge is spread to other stakehold- ing on financial education is scheduled to ers: namely, the customers and commu- be available for the entire Bank network. • Bradesco University Account (finan- Treinet – Personal Finance: Treinet – Responsible Credit nity. Customers can download software, cial education for youngsters) • 2012: 5,593 people • 2012: 2,590 people such as Net Finanças, to support personal Network’s strength The Bradesco University Account has or corporate financial management de- developed the web series Pra toda vida, Videos on Financial Education (to be launched in 2013) cisions. Net Finanças Pessoais and Net Bradesco invests significantly in the which helps university students to use • Unit I – Responsible Credit and Credit Card Finanças Prime versions allow for the organization and availability of online money wisely. This is done through con- • Unit II – Opening of Accounts, Consortium, Social Security, Insurance, importing of internet bank account data; content, videos, and web tools on fi- tent and interactive videos that offer Investments and Capitalization Bonds accessing graphs and reports on financial nancial education for individuals and facts and situations of students and their situations; controlling investments and companies. The purpose is to offer di- personal finances.

170 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 171 Good Practice Financial Markets p ou

r We have committed, by the end of 2015, UK, Find Invest Grow, and the RSA – we Enterprise resources G RBS Inspiring Enterprise to: are delivering targeted research and pro- grams to help drive the entrepreneurial Inspiring Enterprise provides a range • help 100,000 young people to explore agenda in the United Kingdom. of resources and support for organi- tland

o enterprise, develop their skills, and zations that work with young entre- start up in business, whatever their Every year, we commission research preneurs, women entrepreneurs, and S c f The RBS Group has been a signatory of the UN Global Compact since 2003. We support background; into a range of topics, including current social entrepreneurs. This includes access o the Compact, as we believe that the resources available to businesses can be leveraged to • inspire and enable 20,000 women to trends, the needs of entrepreneurs in our to networks, advice, inspiration, and explore and unlock their enterprise target groups, and the changing nature of practical facts and figures about how ank create sustainable development and more sustainable economies across the globe. As part of

B potential; enterprise support. We use this research these groups can best be supported on building a sustainable RBS, we recognize the responsibility we have to be a positive force in • support 2,500 social enterprises, work- to inform our own approach and to help their entrepreneurial journeys. The RBS yal the communities in which we operate. One of the ways in which we do this is by encouraging ing in partnership with the sector to us direct our funding and support to Group and our partners also provide a Ro improve access to expertise, markets, where it will be most effective. wide range of events and services for a more entrepreneurial culture. From the classroom to the boardroom, we are inspiring and and finance. potential and existing entrepreneurs enabling enterprise at every stage of the journey. Through Inspiring Youth Enterprise, we to help them realize their potential and In summary, Inspiring Enterprise is how have extended our partnership with The achieve their ambitions. we encourage more people in more com- Prince’s Trust – one of the United King- munities to explore enterprise, build dom’s most successful supporters of youth Funding By Royal Bank of Scotland Group their skills, and, ultimately, to start up enterprise – to help young people from and succeed in business. disadvantaged backgrounds get the sup- We are making £ 3 million available port they need to start up in business. We between 2012 and 2015 to provide grant We know that starting and running We also know that people need help to with partners and charities – to help Enterprise leadership have also launched our student enterprise funding to nonprofit organizations that a business can be both exciting and explore the idea of enterprise, unlock people explore and develop their enter- programs in partnership with Find Invest run programs to offer support and en- challenging. We understand that en- their potential, and gain the right skills, prise potential. While we will always When it comes to entrepreneurship, the Grow – RBS ESSA and RBS EnterprisingU courage more young people and women trepreneurs and businesses need the knowledge, and networks before they support entrepreneurs and businesses RBS Group is leading in both thought and – to encourage, reward, and recognize into enterprise. This may include en- right combination of support, advice, can achieve their ambitions. This is what of all shapes and sizes, we are focus- action. Working with partners – includ- undergraduates’ enterprising activities terprise training, business mentoring, and funding to succeed. That is why we Inspiring Enterprise is all about. ing additional efforts on three groups ing The Prince’s Trust, Social Enterprise across the United Kingdom. skills development, workspace support, provide a wide range of products and that could play a stronger role in the or something completely new and dif- services for businesses of all shapes and Inspiring Enterprise draws together the entrepreneurial economy, if given more ferent that will aid young people and sizes, in every sector of the economy. work that we do – including our work support. women to explore the idea of enterprise and build their skills. Organizations can Other RBS Enterprise Initiatives apply for funding for their programs through a competitive process, which is open several times a year. In addition, we provide loan funding to social en- • Mobile Business School (MBS). The MBS visits universities, London terprises through the RBS Group Micro- boroughs, and trade exhibitions and partners with enterprise agencies, finance Fund (RBS MFF). The RBS MFF charities, councils, and libraries to provide enterprise education to a large is an independent arms-length charity number of people, support entrepreneurship, and encourage ambition. set up 10 years ago to work with the community finance and social enter- • Start-up Surgeries. The Start-up Surgeries offer guidance to potential new prise sector. The RBS MFF breaks down business owners and those who have just started trading. This guidance traditional barriers experienced by social is delivered locally and covers a wide range of topics such as marketing, enterprises, as it offers an alternative taxes, and legal information. route to finance. It is our aim to support • Business academies. The academies aim to provide additional support to this sector as it continues to grow and businesses through enterprise education and providing them with the tools develop and eventually reach a stage they need to be successful. where these organizations find it eas- ier to obtain finance from mainstream • Trade clinics. These clinics form a key part of a program of events focused financial institutions. on educating SMEs on doing overseas business. These are typically run in local offices or local venues for 10 to 20 clients, and they are usually managed with input from UK Trade & Investment, local chambers, or other For more information about the funding third parties. that is available, please visit our website www.rbs.com/inspiringenterprise

172 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 173 Agenda Integrated Reporting

INTEGRATED REPORTING

Growing expectations of stakeholders and legislators as well as the steady growth of global trade flows have added significantly to the complexity of businesses. This comes along with the call for a more holistic reporting of companies’ financial and nonfinancial performance. This is the core idea behind integrated reporting: It wants to provided in a coherent way a clear link between economic drivers, financial information, and social and environmental impacts. While the concept is clear, the roadmap is still vague. The International Integrated Reporting Council (IIRC) shall help to overcome this.

174 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 175 Agenda Integrated Reporting

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Mr. Bock, in April 2012 you were appointed by the UN Secretary- How would you define the target group of your report? And how do you think integrated General Ban Ki-moon as a new member of the UN Global Compact reporting might change the behavior of your target group? Board. What are the main reasons for BASF’s engagement in the UN Global Compact? Our report targets expert readers from both the financial and the sustainability communities. It aims to serve as a basis for assessing BASF’s current and future Kurt Bock: As a founding member of the UN Global Compact in risks as well as opportunities, and therefore it enables investors and other stake- 2000, we strongly support the role of the UN Global Compact as a holders to evaluate our performance and strategy. Our report also strives to give peer-learning and dialogue platform. By combining high-level com- a full picture of our company’s performance to enable investors and analysts to mitment with hands-on learning at the local level, the UN Global judge whether BASF is a suitable investment. Furthermore, integrated reporting Compact has gathered experience with concrete best practices in the helps us to further strengthen our reputation as a reliable and responsible business area of sustainability, and it has a unique competence in the field partner. In the long run, we ensure our license to operate by providing neighbors, of facilitating multistakeholder dialogue and projects. NGOs, politicians, and others with transparent information.

BASF is also participating in the LEAD platform of the UN Global Compact. Currently there is no internationally recognized standard for integrated reporting. Could the What is your experience with the initiative so far, and what are your current work of the International Integrated Reporting Council help to move integrated reporting priorities as a LEAD company? into the mainstream?

We welcomed the opportunity of becoming more active in sharing The International Integrated Reporting Council (IIRC) is in the process of defining a our experiences with other Global Compact members, when the framework for integrated reporting. The discussions and exchange of information UN Global Compact launched its LEAD platform in 2011. After a among different companies in the IIRC pilot program enable us to better meet the two-year pilot phase, LEAD is now focusing on a few workstreams expectations of our stakeholders, and especially those of our investors. more intensively. BASF is currently engaged in two workstreams: One deals with the post-2015 development process of the UN. Here, What are BASF’s main challenges regarding integrated reporting? the UN Global Compact is asked to bundle and bring in the perspec- Dr. Kurt Bock, tives of participating companies. The other workstream deals with An integrated report has to reflect an integrated corporate strategy: It is an excel- Chairman of the Board of Executive Directors integrated reporting. lent way of demonstrating that sustainability is an integral part of our strategy and of BASF SE operations. All information is provided in a single publication that is externally The term “integrated reporting” seems to be on everyone’s lips at the moment. audited. One challenge we face in the context of integrated reporting is the inclu- Your company has been publishing an integrated report since 2007. Why did sion of non-financial data within an ambitious reporting time schedule. BASF decide to do this? What do you think will be the main challenges in the next years? We aim to demonstrate how sustainability contributes to the long- term success of our company. As the first large German company, The main challenge of an integrated report is to provide a view of the material we have documented our economic, environmental, and social aspects of a company in a comprehensive way to its stakeholders. It is important performance and provide specific examples to demonstrate the in- for us as well as the readers of integrated reports that the various initiatives terdependencies between financial and non-financial information. concerning integrated reporting such as IIRC are compatible with existing We have made progress toward a fully integrated report, but there reporting standards such as the Global Reporting Initiative and the UN is still potential to further integrate our reporting. Global Compact.

176 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 177 Agenda IntegratedISO 26000 Reporting

Integrated Reporting: This contribution strives to answer the following questions: Why do we need to realign corporate reporting? Is it old Old Wine in New Bottles? wine in new bottles or does it contain revolutionary ideas about corporate reporting? What is the additional value The EnBW Path to a Contemporary Realignment of integrated reporting and what does EnBW’s path toward of Corporate Reporting integrated reporting look like?

By Dr. Lothar Rieth and Christoph Dolderer

In times of globalization and economic and financial crises, number of stakeholders as well as their expectations over the organizations are faced with a myriad of challenges. They years have grown considerably. Therefore, some companies have to reinvent their business models and implement new, produce “Sustainability” or “Environmental, Social and Gov- innovative structures. Like many other organizations, EnBW ernance” reports that consider these factors. Sustainability has been affected as well, in addition to issues relating to the reports do not sufficiently address the risks and opportunities government-prescribed energy system transformation (En- associated with the business strategy and model, nor are they ergiewende) in Germany. EnBW is one of the largest energy well-known and relevant within companies. More reports and companies in Germany and Europe. In 2012 EnBW employed more information do not imply better reporting. a workforce of about 20,000. These employees generate, trade, transport, and sell energy. Decentralized energy solutions, As a result, discussions have been carried out for several years renewable energies, and low-carbon production are what the as to whether the published corporate information should be business focuses on. In these turbulent times in the global realigned and in parts condensed, made more transparent, and economy – and in the utility sector in particular – EnBW formulated in a more understandable way. New concepts for has decided to implement the idea of integrated reporting. reporting are necessary and go beyond the existing traditions and legal requirements. The idea of integrated reporting is A changing landscape of reporting considered a viable alternative.

In the last decade, the global economy has suffered under The International Integrated Reporting Council the worst financial crisis since the 1930s – a crisis that was in part driven by individuals and organizations focusing on All observers are aware that, as with all good ideas, a common short-term profits and rewards, irrespective of their long-term and consistent understanding of integrated reporting is highly sustainability. The crisis has underlined the need for capital necessary to gain acceptance in markets, politics, and across market decision-making that reflects long-term considerations society. Nevertheless, until recently, no standards or princi- and implications. Furthermore, it has questioned the extent ples for integrated reporting had been set. The International to which corporate reporting disclosures – as they exist to- Integrated Reporting Council (IIRC) was founded with the sup- day – reveal systematic risks to business, and whether this port of HRH Prince Charles with the Prince’s Accounting for is sufficient and transparent. For years, corporate reporting Sustainability project in August 2010. It was intended to fill became more voluminous and complex. Business reports are this gap by developing an internationally binding framework therefore equally exposed to fundamental criticism and used that supports companies in preparing an integrated report. less as a primary source of information. At the same time, the With a number of draft papers, the IIRC proposed a framework

178 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 179 Agenda Integrated Reporting

for combing financial core elements with environmental and Four main elements of integrated reporting can be highlighted: thereby necessary prerequisites. EnBW’s path is signposted by there are discussions as to whether the German management social information, as well as aspects of corporate governance, a continual convergence process that includes many internal report (Lagebericht) already fulfills the recommendations of the in a distinct, precise, consistent, and comparable format. 1| The concept of integrated reporting, with its guiding princi- stakeholders in different working groups. EnBW’s integrated Consultation Framework on integrated reporting. The initial The Council is composed of representatives from the most ples and content elements, represents not only an evolution report is adapted on a homoeopathic dosage level so as not view that there are no major changes in comparison to the relevant organizations that have shaped financial reporting but also a revolution in corporate reporting that increase to overburden the reader with this new form of reporting. requirements of the German management report (s. DRS 20, in the past and who come from the sciences, for example: the quality and the information value of corporate report- German Accounting Standard, a regulatory standard for the companies such as EnBW, auditing firms, and organization ing according to the motto “Less is more.” As an interim result, EnBW has published a combined report group management report in Germany) has to be taken into such as IASB, IOSCO, and the World Bank, as well as leading for fiscal year 2012. EnBW consciously uses the term “combined consideration. But upon closer examination, significant changes organizations in the field of sustainability, such as the Global 2| The concepts of integrated thinking and integrated report- report” – in other words, a combination of the sustainability can be identified when compared to the current legal require- Reporting Initiative. As one of the leading actors in developing ing are supposed to reflect the management capability to and business reports – because not all central concepts of ments. These affect the accuracy of the report, the expectations corporate reporting, the European Union is also being closely monitor and to manage the complexity of the corporate integrated reporting have been implemented yet. This report of the linked representations, stakeholder-oriented reporting, followed with great interest concerning current developments value creation process. Following this logic, the actual was created based upon an optimized sustainability strategy and future orientation. in integrated reporting. integrated report is at the end of the process chain. and it already combines key aspects of the business and sus- tainability reports to a major degree. In addition, first steps These and other questions are being discussed on a regular What is integrated reporting? 3| Integrated reporting is a holistic approach that connects were made to reduce the amount of facts provided to limit basis together with other German pilot program companies classical financial reporting with non-financial information the report to the most crucial information. (SAP, Munich Airport, BASF, and Deutsche Bank) at the German The IIRC Consultation Draft, presented in April 2013, is a (such as sustainability issues, risk management, and corpo- IIRC Round Table. It is the objective of the Round Table to principle-based and not a rule-regulated approach. From a con- rate governance aspects). It merges all material information EnBW’s project organization have regular exchanges of experiences concerning the central tinental European point of view, this constitutes a less precise about strategy, corporate governance, and performances, and question of implementing IIRC recommendations. approach while containing fewer mandatory requirements. thereby mirrors economic, ecological, and social contexts EnBW’s path encompasses at its heart a company-wide project within which a company is operating. that was set up by the EnBW Board of Directors to implement Integrated reporting can definitely not be classified as “old At the heart of the Consultation Draft is the value concept as the idea of integrated reporting across business units. The pro- wine in new bottles.” It constitutes a new approach for com- well as the concept of materiality, which has a great effect 4| The concept of integrated reporting is not only a commu- ject is under the leadership of one employee from the finance pany reporting as well as for corporate governance. This new on the process of integrated thinking within the company nication instrument in terms of report optimization, but branch and one employee from the sustainability branch (both approach has led – and will lead – companies in the near and the assessment and the comprehensibility of connecting also a steering tool that is used to measure financial and authors). This step is an important signal for a change from future to alter their approaches to collecting, linking, and financial and non-financial KPIs. The Consultation Frame- non-financial objectives through a corporate performance internal “silo thinking” – irrespective of what degree this preparing financial and non-financial information and to work defines integrated reporting as a process that results in system with KPIs and target values. situation is present in a company – to an integrated approach. external reporting. In comparison to compliance with rule- communication by an organization, most visibly a periodic For achieving the project goals, a close mesh of all relevant based approaches, it has the potential. The discussion entails integrated report about value creation over time. The most It is the declared objective to communicate the internal manage- business units is crucial, therefore they are all integrated into the promise that, in the future, corporations can gain more visible result of integrated reporting is the integrated report, ment view externally, thereby enabling external observers to the project team. This means that various representatives trust and confidence in the reporting of its stakeholders which, according to the suggested framework, is described as: have a better and more comprehensive picture of the company. from the fields of strategy, communications, investor relations, through more clarity, conciseness, and transparency in their “a concise communication about how an organization’s strategy, corporate accounting, legal affairs, controlling, environmental main communication tool. governance, performance and prospects, in the context of its To test the practicality of the concept, the IIRC started a pilot protection, human resources, and sustainability are involved external environment, lead to the creation of value over the program for companies and investors in 2011. Since then, throughout the process of the project. By introducing integrated reporting, companies can achieve short, medium and long term.” about 100 international companies have been engaged in reputational advantages with key stakeholders by using a this pilot program, which has the goal to further develop Open questions precise, transparent, and representative form of reporting. the framework by adding practical advice from companies and investors – one of the main goals of the IIRC. In April Although significant progress has been made in a number 2013 the IIRC Draft Consultation Framework was launched. of fields with regard to content elements and guiding princi- Pilot participants as well as all interested parties have the ples, some questions remain unresolved. It still needs to be possibility until July 15, 2013, to comment on the framework clarified whether integrated reporting is a renunciation of the and thereby simultaneously participate in the realignment of traditional shareholder value reporting. In the Consultation corporate reporting. In December 2013 the first version of the Draft, investors are described as the main addressees, but at IIRC framework will be released. the same time the concept fosters the idea of a stakeholder orientation, which is advocated by many companies. There are EnBW’s path to integrated reporting different opinions out there as to whether integrated reporting is more than pure report optimization – in terms of reduc- In 2011 EnBW embarked on a journey to integrated reporting. ing and trimming business reports. Corporate experience will The direction of this journey is already known, but the path it highlight whether an integrated governance concept has to takes, together with its internal and external stakeholders, has be at the heart of a process that addresses corporate steering Both authors supervise EnBW’s project on Integrated yet to be determined. In order to do justice to future markets as components for assessing the main corporate objectives as well Reporting. Dr. Lothar Rieth is project manager in the well as political and social demands, EnBW has put a clear focus as presenting the company strategy and performance results Sustainability Department, Christoph Dolderer is Chief on its strategic targets. Long-term and responsible thinking and in a new address-orientated format. In addition, a number of Group Accounting Officer at Energie Baden-Württemberg action, including economic, ecological, and social aspects, are national particularities will have to be resolved. In Germany, (EnBW AG).

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formed with such a comprehensive approach in strategic and Due to the numerous existing regulatory reporting require- operational decisions. Ultimately, it is a topic with implica- ments, it is currently not realistic to call for replacing existing tions for the management, steering, governance, and culture regulated information with an integrated report in the short of an organization. term. Therefore, the IIRC rather refers to adding this infor- mation. However, as one of the goals of integrated reporting Q: A status quo analysis based on the outcome of such questions may is the reduction of current reporting, preparers, users, and What Are the Benefits of be the first step on the road to implementing an integrated reporting standard-setters should find alternative reporting solutions, approach. Which standards have to be applied? such as including information required by the IIRC framework into existing reporting, and additionally making use of the Integrated Reporting? Despite increasing attention on and application of integrated online environment, thereby reducing clutter in the so-called reporting, there is still no common mandatory reporting primary report. standard. The only exception so far is South Africa, where companies listed on the Johannesburg stock exchange have Q: When is my company ready for an integrated report? to provide an annual integrated report – or explain why they By Nicolette Behncke have not – according to the King III Code of Governance Prin- In theory, every company can get ready at any time. However, ciples. The IIRC consultation draft, published in April 2013, depending on the size and complexity of an organization as offers fundamental principles for a new corporate reporting well as the maturity of its reporting, a move toward integrated framework, including content elements and guiding princi- reporting may need longer preparation. Fortunately, many Integrated reporting moves beyond a silo approach of in- The integrated model set out below highlights the scope of ples as well as the “six capitals” approach in order to describe companies will not need to start the process from scratch, formation gathering and reporting toward a more compre- the information that needs to be considered when assessing value creation. Furthermore, the IIRC issued three background because they already publish a transparent, investor-oriented hensive assessment and presentation of a company’s value the information demands of an organization, including the papers on materiality, business model, and capitals, providing annual report, sustainability information, KPIs, and other and performance. This offers various benefits, such as giving connectivity between the various areas – external, strategic, preparers with a clear idea of how a good integrated report information required for integrated reporting. However, such organizations a more holistic view of information relevant to business, and performance. Regarding external drivers, compa- should look. Maybe the final standard to be published in De- information is often not linked to their strategy and business their strategies, business models, and abilities to create and nies might ask: What is the market and regulatory landscape cember 2013 will become mandatory one day. Nevertheless, model. Therefore, moving toward integrated reporting will sustain value in the short, medium, and long term. like today, and how is it changing? What are the megatrends we think that the principles of good reporting included in the mean restructuring the underlying reporting and internal that are changing society now, and how will they impact IIRC framework can be applied regardless of specific regulation. processes. In some organizations, the structures may be so More specifically, potential benefits are: markets in the future? With a view to the business model, In addition, we already see various reporting examples that complex and fragmented that companies may even consider relevant questions include: Are the business model and supply reflect the ideas of integrated reporting very well and thus establishing a new structure with processes designed specifi- • greater access to and transparency of information from a chain designed to withstand the impacts of climate change, offer organizations that are aiming to move toward integrated cally for integrated reporting. wide range of both internal and external information sources, technology failures, and natural disasters? What assumptions reporting a foundation to build upon. through integrated processes and the standardization of have been made regarding the availability of resources? Given the developments and the potential benefits of integrated information; Q: Is an integrated report a “one size fits all” solution? reporting, organizations should consider moving toward inte- Answering these questions within an integrated approach grated reporting in anticipation of regulatory requirements. It • streamlined and better-connected reporting through more will give companies a much clearer picture of their industry, In essence, an integrated report should tell the story of the may help them to make a difference as first movers and thus reuse of reporting elements, transparency, and collaboration markets, and broader environment as well as how to change company. This includes historical financial information as give them a valuable competitive advantage. on reporting; products and services, business models, and positioning to well as information that is forward-looking, explains the remain successful. company’s strategic direction, and discusses targets, risks, and For those who do not yet report on non-financials, integrated • more relevant and understandable information available opportunities to be addressed. The structure and length of the reporting can be an opportunity to move to a more compre- for management and stakeholders to enable better decision Q: Is integrated reporting an external reporting phenomenon or does report thus depend on the complexity of the company’s busi- hensive and meaningful reporting that meets future require- making; it have wider ramifications? ness. However, the report should focus only on the matters ments from the outset. that the organization considers most material for its value • better allocation of capital and other resources; Even though the International Integrated Reporting Coun- creation. This again leaves room for a different understand- cil (IIRC) discussion paper, which has triggered the current ing of the scope of reporting and will lead to diversity in • better access to capital markets and business partners; discussion about integrated reporting, initially provides a integrated reporting practices. Therefore, the development framework for external reporting, its aim is much higher. of supplementary guidelines for a consistent application of • competitive advantage through cost savings, operational The idea of integrated reporting is focused on making some the IIRC framework will be crucial to assure comparability efficiencies, and differentiation. real changes to the existing corporate reporting model, both among preparers. to external reporting as well as to internal decision making. However, the roadmap to realizing such benefits is not nec- An integrated report is merely intended to be one output of Q: Is an integrated report an additional document that organizations essarily a simple one. It requires a comprehensive approach: integrated reporting, which should reflect – and will depend need to produce? understanding the company’s strategy drivers, identifying key upon – integrated thinking within an organization. It is about stakeholders and their specific expectations, and implementing understanding the relevance of various factors – financial as According to the IIRC framework, the main output of inte- Nicolette Behncke is expert for processes to obtain the information necessary for an integrated well as non-financial – and its connectivity to the company’s grated reporting seems to be a single report that the IIRC Integrated Reporting at the Audit and approach to managing the business. business model, as well as about considering the insights anticipates will become an organization’s primary report. Assurance Company PwC.

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When does it pay? Linking Carbon and Financial Performance

By Prof. Dr. Timo Busch Why do firms have a management orientation toward sustainability? How should society reconcile the dilemma of maximizing satisfaction today without placing an undue burden upon ourselves in the future? Starting from very fundamental investigations, John Spicer was one of the first authors to conduct an econometric study In the strategy literature, a related question remains fiercely debated: that investigates the economic consequences of ecological and Does it pay to address ecological and social issues? social efforts. Ever since then, a substantial body of more recent management research has sought to address this question and investigate the relationship between corporate sustainability performance (CSP) and corporate financial performance (CFP) from different angles. However, there continues to be much confusion within this debate. At the 2010 Academy of Manage- ment conference in Montreal, papers presented in a session entitled “Examining the corporate social performance–corpo- rate financial performance relationship” offered various results: no relationship, a positive relationship, or even a curvilinear relationship. These results are reflected by scholars’ attempts to detect an outperformance of mutual funds or specialized indexes that invest in firms with enhanced CSP: Empirical studies suggest that sustainable investments may either out- perform the market, underperform the market, or make no difference in terms of their risk-adjusted financial returns.

As a result of these mixed findings, some scholars suggest that the situation has remained the same: There is no clear relationship between CSP and CFP. Other scholars conducted meta-analyses and indicate – albeit highlighting epistemo- logical and methodological concerns – that CSP practices are likely to pay off. At least there seems to be no clear indication of a negative relationship between CSP and CFP.

One common notion that has recently emerged in the literature emphasizes that there is no unequivocal, final answer to the CSP–CFP debate. As a consequence, focusing further on the “Does it pay?” question defeats its purpose, as it “reinforces, rather than relieves, the tension surrounding corporate re- sponses to social misery.” As a call for extending this debate, scholars have suggested that instead of seeking to answer the “Does it pay?” question, future research should address the more important one of “When does it pay?” This line of thought is consistent with Rivoli and Waddock’s argument that there is a clear business case for sustainability, but it shifts over time. What is – and what is not – responsible corporate practice is time- and context dependent; the same holds for the profit- ability of CSP practices. In sum, Berchicci and King conclude that CSP practices “may pay only for some firms, or in certain cases, or in certain time frames.”

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Extending the business case debate further efforts to increase CSP unnecessarily constrain the efforts can detect previously overlooked efficiency potentials. Managerial implications firms’ actions through increased costs. Following this line of Increasing operational efficiencies then, in turn, contributes to One reason for the inconclusiveness of the business case de- thought, management should only focus on maximizing profits the firms’ profitability and competiveness. Hillman and Keim The way ahead is that the short-term efficiency-driven objectives bate can be ascribed to the lack of long-term considerations. and creating shareholder value. It is obvious that, under these present similar arguments in the stakeholder context: If CSP need to be aligned with a long-term value-creating strategy. To illustrate this in more detail, it is important to distinguish assumptions, there is not much room for more sustainable busi- practices are directly related to primary stakeholder concerns, In a first step, for example, Unilever has moved its reporting between three generic positions within this business case debate. ness practices, especially to the extent that is urgently needed. they may not only serve to improve stakeholder relations, but practices in this direction. As from 2011 the firm has been First, there is the “only profits matter” argument: Rooted in also improve shareholder value. Following this line of thought, releasing a quarterly trading statement every second quarter neo-classical economic theory, this argument considers firms Second, there is the short-term payoff argument: This argument it has been argued that there is no linear relationship between instead of publishing full financial results. The purpose behind to be efficiency-driven anyway, and thus no special emphasis is rooted in the assumption that, because of information asym- CSP and CFP. The managerial advice would be to make use of this change is to enhance communication about corporate on managing ecological or social issues is needed. The mana- metries, companies may not always follow efficiency-driven cost-benefit analyses to determine when the optimal amount performance by moving from a short- to a longer-term focus, gerial advice would be to incorporate sustainability only to goals and make optimal decisions. Based on this assumption, of investments for enhancing CSP is reached. which better reflects the way the firm manages its business. the extent as it is covered by business as usual processes. Any environmental-strategy research suggests green management This is a good starting point. Third, there is the long-term value-creation argument: This school of thought proposes that management should care about The next important step is to understand a firm’s ecological environmental degradation, as this is expected by society. Ac- embeddedness, as it is a key determinant for the long-term cording to this line of thought, in the short run it is possible success of an organization. Based on this understanding, new The CSR-CFP Link – Some Useful National Studies that firms will face a negative effect of CSP practices on CFP, as questions need to be asked when entering markets, develop- such activities do not necessarily result in immediate returns. ing products, and evaluating investment opportunities: How However, in the long-term they benefit from such a strategy, resource-dependent are the production processes? To which Malaysia: as their stakeholders value more socially acceptable business extent do we explore low-carbon opportunities? Are there practices, which in turn contributes to long-term business any potentially controversial business practices, notably in Mustaruddin Saleh, Norhayah Zulkifli and Rusnah Muhamad: An Empirical Examination of the Relationship between success. The managerial advice would be to investigate when the supply chain? Essentially, as part of its long-term-oriented Corporate Social Responsibility Disclosure and Financial Performance in an Emerging Market and how global sustainability trends and challenges are go- strategy, a company does not use the prevailing uncertain- Link: http://www.pbfeam2008.bus.qut.edu.au/papers/documents/MustaruddinSaleh_Final.pdf ing to change the business environment, and to implement ties within the business environment as reasons for inaction. South Korea: corporate strategies that respond to these changes. Instead, the principle of responsible leadership can serve as Fu-Ju Yang, Ching-Wen Lin and Yung-Ning Chang: The linkage between corporate social performance and corporate the foundation for a proactive business strategy. financial performance Most of the empirical research on the business case considers Link: http://www.academicjournals.org/ajbm/pdf/pdf2010/apr/yang%20et%20al.pdf rather short-term effects, for example, the return developments As a precondition for firms implementing such a strategy, the in the following year or the evaluations in financial markets organization’s self-image is important. It has to shift its taken-for- Indonesia: within a short time frame after an event. However, in practi- granted stance toward an attitude of being a responsible leader Hasan Fauzi and Kamil M. Idris: The Relationship of CSR and Financial Performance: New Evidence From Indonesian cal terms, it may often be difficult to precisely determine the that acknowledges the relevance and necessity of taking new, Companies optimal amount of CSP investments, especially when purely uncommon, and sometimes even inconvenient pathways that Link: http://ssrn.com/abstract=1694284 looking at the short-term financial benefits. Some investments reflect the firm’s ecological embeddedness. As Amory Lovins may immediately be profitable, others not. Thus, limiting puts it, such leaders who want to get it done need “guts, creativ- Bangladesh: CSP–CFP evaluations only to short-term considerations can ity, and perseverance.” Responsible leaders can fundamentally Kazi Zahirul Islam: Corporate Social Responsibility (CSR) and Issue to Corporate Financial Performance (CFP): be seen as an important reason for the inconclusiveness of change corporate strategy and influence “others to understand An Empirical Evidence on Dhaka Stock Exchange (DSE) Listed Banking Companies in Bangladesh the business case debate. and agree about what needs to be done and how to do it, and Link: http://www.iiste.org/Journals/index.php/EJBM/article/view/2456 the process of facilitating individual and collective efforts to Moreover, in most of the cases, the fundamental negative accomplish shared objectives.” Thus, business leaders can be- South Africa: consequences of unsustainable business practices are likely come important drivers of (structural) changes. From this point Hopolang Leeto Ntoi: Impact of Corporate Social Responsibility on the Financial Performance of Companies listed on the to become visible in the long run. This, in turn, implies of view, the primarily instrumental motivation of a long-term Johannesburg Securities Exchange that efforts to become more sustainable may also require value-creating strategy finally merges with the normative form Link: http://upetd.up.ac.za/thesis/available/etd-06182011-184232/unrestricted/dissertation.pdf some time to become tangible – or, in business language, to of addressing corporate sustainability. materialize. First empirical evidence suggests that, in fact, a Pakistan: long-term orientation has a positive effect on CFP. Wang and Nadeem Iqbal, Naveed Ahmad, Nauman Ahmad Basheer and Muhammad Nadeem: Bansal find exactly that for firms with a high level of long- Impact of Corporate Social Responsibility on Financial Performance of Corporations: Evidence from Pakistan term orientation – their relationship between corporate Link: http://www.macrothink.org/journal/index.php/ijld/article/download/2717/2286 social responsibility and CFP is stronger compared to firms with a low level of long-term orientation. Busch, Stinchfield, Sri Lanka: and Wood find a positive effect of CSP on CFP in the long run, Wijesinghe K. N. and Senaratne S.: Impact of Disclosure of Corporate Social Responsibility on Corporate Financial whereas there is no support for this effect in the short run. Performance in Bank, Finance and Insurance Sector in Sri Lanka As such, it may be important to actually answer the “When Dr. Timo Busch is Professor at the Link: http://www.kln.ac.lk/uokr/ICBI2011/A&F%20141.pdf does it pay?” question by considering the long-term effects School of Business, Economics and Social and implications of CSP. Science, University of Hamburg.

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Unpacking the The continuing financial crisis calls for different managerial paradigms and a broader CSR-CFP Link definition of business success. The narrow and exclusive focus on short-term monetary results has led to counter-productive and negative consequences for business and society. All over the world, different approaches are emerging. Thanks to innovative corporate social responsibility (CSR) practices, a great number of firms have been working with stakeholders in order to support broad and shared value-creation processes that are able to benefit the different constituencies, including not only shareholders but also employees, customers, suppliers, the community in which the company operates, and others.

By Francesco Perrini, Angeloantonio Russo, Antonio Tencati, and Clodia Vurro

The real impact of CSR efforts on corporate performance is In more detail, our contribution provides a guide that is still questionable. In fact, for four decades, research on the useful for understanding better the mechanisms by which role and responsibilities of business has centered on the certain activities may translate into improvements in a firm’s business case for CSR. As a result, an increasing number of performance, leveraging on specific drivers of market and studies have appeared on the ties between corporate social operational results. Thus, it moves beyond a straightforward performance (CSP) and corporate financial performance (CFP). view of the CSP-CFP link, underlining the limits of paying Yet, the business case for social responsibility and the related disproportionate attention to “black box” approaches to both link between CSP and CFP remain the most controversial areas CSR and the performance of firms. in studies on business-in-society. Deconstructing the CSP-CFP relationship: As a consequence – and in order to keep research aligned A stakeholder approach with business practice and growing practitioner interest in CSR – the shift away from a simplistic assumption over the Rooted in the stakeholder theory of the firms, recent research link between CSP and CFP has become increasingly stringent, has been appreciating the impact of CSR, both at different along with a growing request to reorient empirical investigation levels of analysis and in specific management domains and toward a deeper understanding of what it means to succeed stakeholder interactions. In this context, research has started in CSR, disentangling its specific dimensions. to focus on organizational, market, consumer-based, and/or environmental outcomes of specific areas of responsibility. Based on an extensive review of the literature on the CSP-CFP Moreover, emerging theoretical and empirical accounts have link, our work aims at providing a comprehensive organizing started to investigate the impact of specific tools and practices framework for systematizing the performance effects of specific of CSR management in a stakeholder setting, based on a con- CSR-related efforts. In particular, adopting a stakeholder-based ception of CSR as a new governance model rooted in the value view of a firm’s engagement in CSR, we delve into the various of stakeholder relationships and in the capacity of a firm to dimensions underlying the relationship between stakeholder- meet stakeholder needs beyond mere legal compliance. Thus, a related CSR policies and specific performance outcomes. In clear understanding of CSR performance consequences should so doing, we point out the drivers of the relationship, thus disentangle different management areas and investigate how advancing the existing debate over the need for a contingency specific activities translate into organizational, managerial, or approach to the business case for CSR. market gains according to a multiple-bottom-line perspective.

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An extensive and in-depth review of 250 empirical and theoreti- internal organization) can lead to both revenue-related and By unpacking the CSP-CFP link, our framework provides an cal contributions allowed us to map the major mechanisms cost-related outcomes through its impact on performance important further step for both research and managerial by which CSR efforts may turn into performance outcomes, drivers such as, for example, perceived trustworthiness and understanding of the need for setting clear boundaries and leveraging on stakeholder-related performance drivers. Accord- company reputation, organizational commitment, consumer- specifying levels of analysis while addressing the business ingly, Figure 1 provides a summary picture of how integrat- company identification, and a firm’s innovativeness. case for CSR. ing CSR in specific management domains (e.g., supply chain, Implications for business

Figure 1 Firms are searching for legitimacy. Due to the financial crisis and the related corporate scandals, society is asking firms to generate more than money for the benefit of limited groups The CSP-CFP multilevel framework: efforts, drivers, and outcomes of interest such as top managers and main shareholders. How- ever, several companies “…continue to view value creation narrowly, optimizing short-term financial performance in a bubble while missing the most important customer needs and CSR EFFORTS DRIVERS OF PERFORMANCE PERFORMANCE OUTCOMES ignoring the broader influences that determine their long-term success” (Porter and Kramer).

Internal organization If many firms overlook these crucial opportunities, it is Commitment Work content, climate, and environment because the business case for CSR is still elusive. The lack of Job design Satisfaction once-and-for-all supportive evidence has often undermined Knowledge management Motivation efforts to fully integrate the CSR perspective into manage- Safety and stability rial decision making. In parallel, this issue also has a great tives and efforts in order to better evaluate the real quality impact on the corporations’ relationships with investors. In of management and the sustainability of the value-creation Customers Trust fact, if there is no clear linkage between CSR and, for exam- processes developed by the companies they work with. Transparency and reliability Reputation ple, net income, earnings per share, and market value, why Open dialogue Identification should CSR be a worthwhile consideration in investment Furthermore, our framework could also assist a more balanced Mutual understanding decisions? Financial markets and the “mainstream” invest- interaction between firms and the investment community. At Satisfaction Quality and innovation Revenue-related outcomes ment community do not appropriately value the CSR efforts the moment, this field suffers from a knowledge gap. Growth opportunities carried out by innovative firms and this behavior penalizes Supply chain Innovation Competitive positioning business and society. To address the sustainability challenge, several firms are devel- Involvement and dialogue oping more participative governance systems and deploying Trust Brand equity Integration of CSR criteria into vendor From a strategic standpoint, rejection of CSR dramatically broad value-creation processes by targeting, involving, and Quality selection, managing, and evaluation limits companies’ understandings of their surrounding en- engaging stakeholders, but these efforts are not fully appreci- procedures vironments. For the investment community, ignoring the ated by the financial markets. The perspective provided by the possible consequences – if not benefits – of CSR means los- CSP-CFP multilevel framework outlined in this study offers a Society License to operate ing opportunities for more reliable and robust investments. positive contribution to address this crucial issue and direct Engagement and dialogue Social capital Despite some attempts to integrate these points into main- the behavioral patterns of firms and investors toward more Cost-related outcomes Cross-sector partnerships Innovation stream management and performance assessments, financial aware, consistent, and informed approaches. Cost of labor considerations are still the prevailing criteria for accepting or Community development Organizational change Operational efficiency rejecting corporate initiatives or investments. Therefore, more The article draws upon Perrini, F., Russo, A., Tencati, A., and Vurro, C.: 2011, Cost of capital comprehensive and reliable tools and methodologies, such as “Deconstructing the Relationship between Corporate Social and Financial Natural Environment Innovation Risk management integrated reporting, to support the evaluations of corporate Performance,” Journal of Business Ethics 102 (Supplement 1), 59 - 76. Impact prevention, control, Compliance performance and business projects are needed. and assessment Reliability Managerial tools and strategies Reputation Our analysis proposes a framework that could help companies and the investment community to better understand how CSR – and therefore more inclusive stakeholder-oriented governance Transparency systems – could positively affect corporate performance. Firms Francesco Perrini (Università Bocconi), Angeloantonio Russo Corporate governance Accountability can refer to that to better assess, reframe, and improve their (LUM University), Antonio Tencati (Università degli Studi di Voluntary disclosure Reliability CSR policies – in terms of their efficiency and effectiveness Brescia), and Clodia Vurro (Università Bocconi) work at the Governance and engagement Fairness – by considering the mechanisms that could lead to enhanced CReSV – Center for Research on Sustainability and Value, Source: Perrini et al. (2011) performance. The investment community can draw on this Università Bocconi, Milan, Italy. The authors contributed framework to increase its understanding of corporate initia- equally to the work.

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Publishing house: Mark Kenber, Uwe Kleinert, Rainer Knirsch, Steffen Kurzawa, Albert Gonzalez Farran (P. 72/73), Laurent Masson/Air France Useful Addresses: macondo Media Group Dominique Lamoureux, Dr. Elmer Lenzen, Klaus Lintemeier, KLM (P. 74), Ayeyarwady Bank (P. 76-79), Bayer (P. 81), Publishing House: Andrew Lofts, Dr. Jan Dietrich Müller, Fred Nelson, Francesco Consolidated Contractors Company (P. 82/83), Green Delta macondo Media Group Greeting: Perrini, Elise Pham, Dr. Bertrand Piccard, Prosegur, Prof. Dr. Insurance (P. 84/85), Rodrigo Herrera/Medcom (P. 86/87), Dahlweg 87 H.E. 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192 Global Compact International Yearbook 2013 Global Compact International Yearbook 2013 193 The ten Principles of the United Nations Global Compact

At the core of the Global Human Rights Environment Previous Editions: Compact initiative are 10 principles for human rights, Principle 1: Businesses Principle 7: Businesses labour standards, the should support and should support a environment and eliminating respect the protection of precautionary approach to corruption. 7 1 internationally proclaimed environmental challenges; human rights; and The Global Compact Principle 8: undertake calls upon globally active Principle 2: make sure that initiatives to promote companies to recognise these they are not complicit greater environmental principles and to take steps to 2 8 in human rights abuses. responsibility; and put them into effect. Principle 9: encourage the development and diffusion Labour Standards 9 of environmentally friendly technologies. Principle 3: Businesses should uphold the freedom of association and the 3 effective recognition of Anti-corruption the right to collective bargaining; Principle 10: Businesses should work against Principle 4: the elemination corruption in all it forms, of all forms of forced 10 including extortion and 4 and compulsory labour; bribery.

Principle 5: the effective abolition of 5 child labour; and

Principle 6: the elemination of discrimination in respect of employment 6 This publication is intended strictly for learning purposes. The and occupation. inclusion of company names and / or examples does not constitute an endorsement of the individual companies by the UN Global Compact.

194 Global Compact International Yearbook 2013 A growing number of businesses in all regions recognize “the importance of reflecting environmental, social and economic considerations in their operations and strategies. Ban Ki-moon, UN Secretary-General”

USD 30 ISBN 978-3-9813540-5-8 Published by Global Logistics Partner

In cooperation with United Nations Publications Printed in Germany, July 2013 – 10,000