Business Respect - CSR Dispatches No 123 - 16 Mar 2008

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An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.mallenbaker.net and produced every two weeks.

In this issue we consider alternatives to feeling guilty about flying.

In the news:

Feature articles on the internet:

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Topics:

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Welcome

Once, many years ago, I was speaking at an event which was focusing on a number of very fascinating issues on a topic which I now forget. In the course of making a point, I used an analogy of environmental taxation on petrol. Whoosh. Suddenly, hands were being raised all across the hall with people wanting to engage in debate on the finer points of transport policy.

Since then, I have known only too well that green transport issues provoke more of a response from people than almost anything else. So it is with some trepidation that I produce a lead article for this edition that definitely goes against the grain of much of the commentary on that most contentious of issues - whether or not we should be taking personal responsibility by abstaining from flight. At least nobody can say that I didn't know what I was getting into.

I might try a vote on the website on the topic soon, although I suspect the results will be overwhelming.

The existing vote will be closing soon. If you remember, it reads:

Private equity companies are, by their nature, less socially responsible than plcs

Yes, they are less responsible 218 (50%)
No, they are more responsible 77 (17%)
There is no difference between them 145 (33%)

Thanks to the 440 people that have voted. Last chance now to get your voice heard on this one.

Mallen Baker
mallen@mallenbaker.net

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CSR News 16 Mar 2008

Australia: Qantas faces charges over global air freight cartel

An action is to be launched against Qantas and other international airlines by the Australian Competition and Consumer Commission over an alleged cartel of air freight operators.

The Commission has invited airlines to admit guilt and pay a settlement charge in order to avoid lengthy and expensive court cases. Companies that accept the invitation will receive immunity from further prosecution. Qantas agreed to plead guilty to the US Government and to pay a $65m fine.

Qantas has made a provision of $64m for further fines from regulators in Australia, New Zealand and Europe.

Toyota says next generation eco-car in sight but still years away

Toyota has said that work is progressing on the next generation of environmentally friendlier car, using fuel cell technology. It will be years, however, before the work produces a commercially viable vehicle.

According to Toyota's president, Katsuaki Watanabe, "significant" technical advances have been achieved in the last couple of years of development. But the company is struggling at the moment to produce similar results at a viable cost.

Toyota tested a fuel cell car last year, and showed that such a vehicle could achieve hundreds of miles on a single filling of hydrogen. But as things currently stand, such a car would be out of the reach of the ordinary motorist, and the necessary infrastructure of hydrogen filling stations does not exist.

UN: Private sector needed in developing countries' climate change fight

The head of the United Nations Development Programme (UNDP) has said that the private sector must be part of the solution to combatting climate change in developing countries.

Kemal Dervis said that whilst state support programmes could be used to help countries to adapt to some of the impacts of climate change, private sector involvement was crucial to help finance long-term solutions.

He said that in the absence of solid measures to mitigate climate change, the impact on developing countries would be much more severe, and would then require more expensive and difficult adaptation measures.

"We must build incentives that if you come up with a technology that does reduce emissions, you profit from it", he said.

UK: Retailer Sainsbury's sees buyer arrested over bribes

A potato buyer for UK major supermarket Sainsbury's has been arrested over alleged illegal payments received from one of the company's suppliers, Greenvale amounting to around £3m.

The buyer, John Maylam, has been arrested along with a member of Greenvale staff on suspicion of corruption and money laundering. Sainsbury's notified the police after learning of the problem from Greenvale.

Greenvale is one of the main producers of potatoes in the UK, and was the recipient recently of the Queen's Award for Innovation.

Canada: Companies investing in social responsibility

According to a new report, Canadian companies are boosting investment in social responsibility, although the changes in policies and programmes are not yet feeding through into significant improvements in outcomes. .

The report, produced by the Richard Ivey School of Business and Jantzi Research, showed that company scores against its system were up in areas of corporate governance, employees and the community. 65 percent of firms have improved their rating during the last year

Companies are investing more in diversity initiatives, but have not yet seen this feeding through into improved gender diversity at the senior management level. In addition, one of the areas of least improvement for Canadian companies was in relation to impact on the environment. Only 40 percent of companies improved in this area, with 23 percent worsening.

Wal-Mart aims for emission reductions from Chinese suppliers

Wal-Mart is to meet with thousands of suppliers based in China in the autumn as part of its programme to reduce emissions produced across its supply chain. The company has already worked with some of its key western suppliers to reduce energy use and waste.

Company CEO Lee Scott said that it would be working with non-governmental organisations (NGOs) to help its team of factory inspectors to fully understand the issues around sustainability and Wal-Mart's commitment in this area, and that its top priorities in China would be to focus on waste disposal and greenhouse gas emissions.

Scott predicted the initiative would take a long time to achieve the best results. The company has already found that early targets of improving the energy efficiency of electronic goods, for instance, has proven to be harder than first thought.

Mining companies demand human rights standards in China

Major extractive firms Anglo American and Rio Tinto have said that they will only sign joint venture agreements with Chinese companies if they can show a willingness to comply with Western standards on human rights, as well as environmental protection.

The recently announced joint ventures focus on operations in Africa, where Chinese companies have been making increasing levels of investment as it has sought resources and have successfully developed links with African governments who have appreciated their hands-off approach on issues others find controversial.

Rio and Anglo have interests in bringing Chinese companies up to the same health and safety and human rights standards that they operate to, a move which should help to reduce the cost differential between them.

Alaska to sue BP over Prudhoe Bay accident

The state of Alaska is to sue BP to over the partial closure of the Prudhoe Bay oil field when its pipeline leaked in 2006.

The action, which will aim for a sum of several hundred million dollars, is intended to recover oil revenues lost through the disaster when over 200,000 gallons of crude were spilt.

BP has already paid a $20m fine over the affair to settle criminal investigations.

The move follows a strategy briefing by the recently installed chief executive of BP Tony Hayward where he gave a new tone of voice for the company's environmental focus, arguing that to date the renewable energy business of BP remained completely unreflected by shareholders in the share price of the company - a fact which could see the company float off that part of the business to see its real value realised. This was not, he said, any change in the commitment of the company to a sustainable future.

CSR FEATURES from the Internet

CSR and CEO ego Building - 14 Mar 2008 FROM Daily Mirror (Sri Lanka)

In early times, stewardship and corporate citizenship may have been thought to be a nice but unnecessary sentiment. Corporate philanthropy used to be linked to building a company’s image and improving its relationships with the community in which it operates.

Today, attracting and retaining top talent is one of the most important reasons for community involvement. People want to work for companies that reflect and support their values. It also helps to boost loyalty and morale, improve motivation and productivity. Corporate citizenship has become a necessity in today’s global society, economy and environment. We all know that top companies tend to have a strong focus on the top line and the bottom line. Shareholders love them and the stock price movements attest to their performance. But perhaps one less visible ingredient of the performance that adds to the growth of the company and its people is corporate social responsibility that most shareholders do not worry too much about because some dividends keep coming year after year.

Read full story

Recent entries from Mallen's blog

Danone learns how far expectations have moved - 12 Mar 2008

The UK's Advertising Standards Agency has just upheld a complaint against an advert for Danone's Actimel pro-biotic drink. Interestingly, the case doesn't hinge on whether the product is proven to have a benefit - that is undisputed. Instead it is ab Read more

Ladies and gentlemen, when does communication fall short of information? - 10 Mar 2008

We are all in favour of communication, aren't we? Communicating often with stakeholders, and particularly with customers, is good practice. But as ever, quality counts. I was reflecting on this again today - as I nearly always do when I travel on Lon Read more

Private equity in the spotlight - 17 Jan 2008

I spoke at Cass Business School last night at a session entitled 'Can CSR and private equity co-exist?'. Mixed audience of businesses and students – around about 150 strong. Read more

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Getting the guilt out of sustainability

Article by Mallen Baker

As a society, we know pretty well how to sell things to people - not just stuff, but ideas, behaviours, you name it. And all of our learning in this area tells us one thing overall - making people feel guilty generally does not do the business when it comes to promoting behaviour change.

Take flying. Airplanes criss-cross the world filled with lots of people who are sitting there feeling guilty about the fact they are flying. Take all of that guilt and pile it up into a corner - and you don't save a single ounce of carbon.

Just to underline the point, the Times ran a piece over a year ago, detailing the known flight paths of the heads of a number of environmental campaigning NGOs. The CEO of WWF had been to Spitsbergen, Borneo, Washington, Geneva and Beijing on business, and taken a holiday in the Falklands, generating 11 tons of CO2, in contrast to the British household that creates about 6 tons per year. The CEO of anti-corporate green group Friends of the Earth flew to Malaysia, South Africa and Amsterdam on business, and took the family to holiday in Slovakia. Eight tons.

No doubt these individuals sit on the plane and feel the guilt. So why do they do it? Well, like all things, it's not just about the act itself, it's about the cost versus the value.

Has the cause of the environment been aided by having Al Gore travel across the world to persuade some of the powerful figures business and government to take the issue of climate change seriously? Of course. Compare the value of those flights with the millions who fly to places where they spend their times in resorts designed to look much like home, but with guaranteed sunshine. No contest.

Let's be clear, if you took away the environmental cost just for one moment: it is good to travel. It is good to be able to meet with your peers to arrange global action or ambitious business deals. It is good to visit different cultures, to understand the diversity of the world, and to adapt your world view accordingly. It is wonderful to see the most beautiful parts of the world and to feel the warming rays of the sun if you come from a part of the world that sees them too rarely. It is great for families separated by distance to occasionally come together and renew the bonds, and mark the big occasions. All of these things are good, and it's why people travel.

What a miserable outcome if the achievement of sustainability means that we never get to do any of those things.

We have to get the question of how we manage the impact of travel away from solely being a question of personal morality - the sense that it is somehow 'wrong' to want to travel.

Instead, we need to look at what is the overall change we need to see to achieve the optimum fit - people being able to achieve the mobility they most need or care about, with an aggregate impact that can fit within a sustainable society. The mission is, after all, not to get people to fly less, it is to reduce the environmental impact of mobility to a sustainable point.

So then you get to a whole bunch of questions that are more interesting. If the technology successfully produces flights that reduce the impact by 30 percent, does that make the existing flight traffic sustainable? What if the Virgin Galactic project, flying people into the upper stratosphere, actually turned out to be the lowest emission way to fly people on the longest haul flights - because most of the emissions are lost and not held within the atmosphere? Assuming we do need to reduce overall numbers flying, if the price mechanism turned flying into a medium level luxury rather than a cheap option staple, which types of journeys would be most susceptible to this kind of price signal? We know that leisure flying is more sensitive to price than business travel, for instance.

Notice, all of the above questions are ones of policy and innovation, not about exhortation. Reduce the impact of flights, and reduce demand through the price mechanism. Airlines still make profits, because the good is closer to a premium priced good. But the overall environmental impact goes down.

But all changes have their consequences. If we have to achieve what may feel like a relatively small change - say a 10 percent reduction in flights overall - since that will probably be accounted for more in the leisure field, the impact on areas across the world that depend upon tourism will be considerable. It may be a price worth paying, but it is good to be clear about what the price will be before committing to the view that such reductions are required. That helps you focus the attention on whether the action really is required before committing to it.

Guilt is not required. It is about finding solutions that work with people the way they are, not the way you would like them to be. If people won't get into the habit of turning appliances off at the wall rather than using a remote, they certainly won't get into the habit of giving up all the benefits listed above which is the reason why they fly. Not even the CEOs of the environment groups.

So it's time to take the heat out of the issue. End the guilt. Enjoy your travel - make sure it is enriching both for you and for the places you visit. And support serious and radical policy proposals about how the environmental impact of travel is brought down - including the price rises that may make you think again about making all the trips you otherwise might have.

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In the news from the latest issue

Apple suppliers in bribery charges

UK: Gap, Next and Marks & Spencer respond to Indian worker abuses

British court delays Yevgeny Chichvarkin extradition hearing

New integrated reporting coalition launched

Netherlands: Trafigura guilty of exporting toxic waste

Kazakhstan: Philip Morris suppliers used child and forced labour

US: Nestle to drop 'deceptive' health claims

China: Hang Seng launches corporate sustainability index

Monsanto GM seed ban is overturned by US Supreme Court

Bhopal trial: Eight convicted over India gas disaster

Nestle announces NGO partnership to verify palm oil

Macmillan faces World Bank ban over Sudan payments

Mining giant BHP Billiton admits it may have bribed foreign officials

Foreign firms pledge not to give bribes in Russia

... more news stories

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Business Respect - most recent edition added on 9th August 2010