- Education: Surpassed 9 million teachers trained worldwide through the Intel® Teach Program.
- Environment: Intel maintained its position as the largest voluntary purchaser of renewable energy credits in the United States, according to the EPA, and completed nine solar electric installations at locations in four U.S. states and Israel. The company has also saved 40 billion gallons of water since 1998.
- Community: In 2010, close to half of Intel's workforce donated more than 1 million hours of service in schools and nonprofit organizations globally.
- Supply Chain Responsibility: Intel increased supplier assessment and audit activities and continued to take actions to address the issue of conflict minerals in the supply chain.
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PUMA commits its Strategic Suppliers to Sustainability Reporting
Sporting Goods Company Launches CSR Initiative on Eve of Soccer World Championships
PUMA, the sporting goods company, working with The Global Reporting Initiative (GRI) and the Gesellschaft für Technische Zusammenarbeit (GTZ) has agreed with 20 key suppliers in South East Asia and other major sourcing regions to issue their own sustainability reports from 2011. Through this project, stated the GRI, PUMA endeavours to enhance transparency as well as social and working conditions in its supply chain by advising factory management regarding weak points in their operations and enabling them to make improvements independently.
Twenty strategic PUMA suppliers based in China, Vietnam, Cambodia and other countries – which produce together more than two-thirds of all PUMA products consumed – will receive GRI certified training on transparent measurement and reporting on their sustainability performance using the GRI G3 Guidelines – the world’s most widely-used framework for sustainability reporting. The training within the Global Action Network for Transparency in the Supply Chain program (GANTSCh) will be conducted by GRI Certified Training Partners. During the reporting process, scheduled to start in 2010, the suppliers will be supported by regional sustainability consultants and the first sustainability reports are expected to be released in 2011/2012.
“Supply chain sustainability reporting is a key part of PUMA’s overall sustainability strategy,” said Dr. Reiner Hengstmann, Global Director of puma.safe supply chain. “Without sustainable suppliers, we will not be able to produce sustainable products or credibly report about PUMA’s own sustainability initiatives. The GANTSCh project helps to ensure that our suppliers fully embrace the concept of sustainability and introduce respective programs in their companies.”
PUMA originally joined the GRI-GTZ pilot project “Transparency in the Supply Chain” which was launched in 2006 in which three PUMA suppliers in South Africa were trained and consulted on issuing sustainability reports. According to the participants, the project helped them to understand sustainability concepts through direct training from experts in the field; to learn how to measure sustainability performance by using key performance indicators; to become more transparent and learn how to report on energy consumption; waste production; work accidents; and other issues. They expanded their understanding of customers’ needs regarding sustainability issues and improved their competitive advantage and reputation.
One of the participants in the pilot project, Impahla Clothing, a PUMA apparel manufacturer in Cape Town, received the ACCA Award (Association of Chartered Certified Accountants) for its maiden sustainability report. Impahla also became the first carbon-neutral garment supplier on the African continent in 2009, after the factory management was introduced to the benefits of sustainability through the project. Recently, Impahla issued its third sustainability report.
The second phase of the project is currently in progress under the GANTSCh program with ten suppliers in six countries (Bangladesh, China, India, Pakistan, Portugal and Turkey) participating. Including Impahla, three suppliers have already released their new sustainability reports while the remaining factories will publish their reports later in the Football World Cup year 2010.
GRI’s engagement with PUMA commenced in 2006 with the generous support of the Gesellschaft für Technische Zusammenarbeit (GTZ) in the joint GRI-GTZ Transparency in the Supply Chain Pilot Project. GTZ is a federally owned, international cooperation enterprise for sustainable development with worldwide operations which supports the German Government in achieving its development policy objectives.
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BAXTER Publishes its 10th CSR Report -- A Pioneer in this kind of reporting, it continues to be a model for other companies
Baxter International Inc. released its 2008 Sustainability Report - Our People and Our Products Make Our World a Better Place.
"We define sustainability as a long-term approach to including our social, economic and environmental responsibilities among our business priorities. Baxter’s efforts in this area align with and support our mission of saving and sustaining lives, " said Robert L. Parkinson, Jr. Chairman and Chief Executive Officer,
The report features the company's commitment to addressing global sustainability challenges through a range of initiatives, with an emphasis on the progress the company has made toward its sustainability priorities and goals.
Baxter's sustainability priorities, grouped into the three broad categories of Our People, Our Operations and Products, and Our World, reflect issues of key concern to Baxter and its stakeholders and areas where the company is uniquely positioned to have a positive impact. Corresponding long-term performance goals demonstrate the company's commitment, motivate continual improvement and help stakeholders assess performance. Among them are creating an inclusive workplace, strengthening math and science education, and reducing greenhouse gas emissions, waste generation and water usage.
The company provided the following summary examples of progress that it says Baxter has made in each priority category:
- Issuing a new Code of Conduct to reinforce the company's commitment to the highest standards of business ethics and integrity and provide additional resources to help employees make responsible business decisions.
- Establishing a 50/50 gender balance in management and executive positions in the Asia Pacific region, resulting in a Catalyst Award for commitment to developing and advancing female employees.
Our Operations and Products
- Applying Lean manufacturing principles to conserve water and other resources, contributing to progress toward the company's water, energy and greenhouse gas reduction goals.
- Incorporating green-building design principles at several facilities, including Baxter's new European headquarters in Zurich, Switzerland, and new research and development facility in La Plaine, Belgium.
- Donating nearly $44 million to people in need around the world through product donations, cash contributions and grants from Baxter and The Baxter International Foundation.
- Providing teacher training, equipment and student-learning opportunities in the field of biotechnology to the Chicago Public Schools through Baxter's Science at Work initiative.
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MARS and CADBURY Claim Dramatic Sustainabilitty Breakthroughs in Cholocale Bar Manufacturing - Going Green
Key corporate statements - first Mars with the Rainforest Alliance, then Cadbury with FairTrade
Mars Incorporated, one of the world’s largest chocolate bar manufacturers, claims it is “to be the first global chocolate company to commit to fundamentally changing the way sustainable cocoa farming practices are advanced by aiming to certify its entire cocoa supply as being produced in a sustainable manner, by 2020.”
It says it is working in line with its “Five Principles” towards developing and advancing sustainable cocoa farming systems for the millions of small holder farmers involved with cocoa production. “Our commitment to sustainability is serious and long-term, and this announcement is a major step towards our global commitment to purchase only cocoa that is certified as being produced in a sustainable manner,” said Paul S. Michaels, Mars CEO and president. “We are determined to put our principles into action, restoring cocoa supply for the next generation.”
Mars said it is collaborating with The Rainforest Alliance, an international, not-for-profit organization, works to conserve biodiversity and ensure sustainable livelihoods by transforming land-use practices, business practices and consumer behavior. They say that by 2020, the goal of the collaboration is to achieve Rainforest Alliance certification of 100,000 metric tonnes of cocoa annually for use in Mars products, a significant portion of Mars total cocoa requirements.
As part of the Mars global strategy to secure its supply of cocoa and improve the livelihood of farmers, Mars will be using Rainforest Alliance certified cocoa in its Galaxy Chocolate, sold in the UK and Ireland, beginning in 2010.
This new agreement links Mars more closely to cocoa farmers, working in partnership to produce cocoa that meets the criteria set out by Rainforest Alliance and other members of the Sustainable Agriculture Network and teaching cocoa producers new farming techniques that will significantly improve yields and increase incomes
Cadbury and the Fairtrade Foundation, announced plans to achieve Fairtrade certification for Cadbury Dairy Milk, its top selling chocolate bar, by end of Summer 2009 for the UK and Ireland. This move will result in the tripling of sales of cocoa under Fairtrade terms for cocoa farmers in Ghana, both increasing Fairtrade cocoa sales for existing certified farming groups, as well as opening up new opportunities for thousands more farmers to benefit from the Fairtrade system.
Cadbury Chief Executive, Todd Stitzer, says, “This is an historic moment for our company. I am proud that the nation’s favourite chocolate bar will display the FAIRTRADE Mark. I was in Ghana during February and saw how vital it is that businesses support their partners and the communities they live in. We believe that by joining forces with the Fairtrade Foundation, we can further improve living standards and conditions for farmers and farming communities, and create a sustainable supply of high quality cocoa for Cadbury.”
“Cadbury’s commitment is breakthrough news for the farmers in Ghana who are very excited that they will be able to sell more of their cocoa as Fairtrade, bringing greater benefits to their communities,” says Harriet Lamb, Chief Executive of the Fairtrade Foundation. “We’re delighted to have the opportunity to certify Cadbury Dairy Milk, enabling all those who buy it to make a real difference for cocoa farmers with every purchase. This certainly sets a new standard for the mainstream chocolate industry.”
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CISCO Publishes 4th Annual Sustainability Report
Extensive Coverage of Corporate Policies
John T. Chambers, President and Chief Executive Officer, Cisco, writes today on the release of the technology company's annual Social Responsibility Report that, "At Cisco we believe that corporations have a responsibility to consider the broader effects of their operations on the communities in which they do business. Cisco's citizenship practices demonstrate our culture of giving back, our commitment to social responsibility, and our understanding that our actions improve the health of our business as well as the health of the global community."
The report does not note issues and problems at Cisco, rather it emphasizes what it claims is the company's leadership in the four areas of employees, the environment, society and CSR governance. The report contains a very substantial volume of information on the corporation's policies and the requirements it makes in the ethics, environmental and employee rights areas of affiliates. But, the tone suggests that this is a report that has largely been fashioned by the communications department.
Cisco has been enmeshed with others with regard to its compliance with censorship demands by the Chinese authorities. The new report does note that an emerging issue is the Internet and Human Rights, but the report here highlights very general principles, noting, for example, " Cisco's Position: Respect and Dignity. Cisco's governance of business ethics, including human rights, applies to our employees, suppliers, and partners.
"Cisco strives to treat employees, and the communities in which we operate, with respect and dignity. As a supporter of the United Nations Universal Declaration of Human Rights and Global Compact Cisco's codes of conduct, employee policies, and guidelines substantially incorporate laws and ethical principles including those pertaining to freedom of association, nondiscrimination, privacy, collective bargaining, compulsory and child labor, immigration, and wages and hours. Cisco's Corporate Citizenship Council reviews these codes, policies, and guidelines."
Another so-called emerging issue for Cisco is privacy and here its views on the China situation might have been expected, but again the statements in the report are exceptionally general. For example, Cisco stated, "Cisco Position: Consumer Trust Is Critical. A core component of Cisco's business is creating products that protect data. We understand the data protection challenges that our global customers face and we deliver innovative solutions to meet their needs. Cisco's values and its technology are combined in our own operations to protect our employee, customer, and business data.
"Because disparate and multiple privacy rules place a heavy burden on global companies, we support a model of industry self-regulation (as opposed to government intervention) in which innovative tools to give consumers greater choice in both protecting their personal data and understanding how it may be collected and used. We believe the industry can achieve a reasonable balance between consumer protection and business requirements, as evidenced by several ambitious and successful industry-led initiatives in the recent past. Where legislation is necessary, we encourage standardization of rules across global jurisdictions.
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L’Oréal sponsors the first Law and Business Ethics Masters Degree
L’Oréal of France is sponsoring a Law and Business Ethics Masters degree at the University of Cergy-Pontoise. The company states that this “is the first degree of its kind in Europe and comes in addition to L’Oréal’s support of the Law and Business Chair.”
The University of Cergy-Pontoise has developed this new graduate degree course in association with the ESSEC Business School (France), the Institute of Business Ethics (UK) and
the Ethics & Compliance Officers Association (USA).
Emmanuel Lulin, L’Oréal’s Director of Ethics, stated that, “This is the first diploma of its kind in Europe. Business Ethics is a complex subject which needs to be addressed with humility and determination. The global leaders of tomorrow are those companies who have integrated ethics into their strategic planning but also their every-day business practices.”
Last year L’Oréal created the Director of Ethics position with direct reporting to the Group’s Chief Executive. This comes at a time when a rising number of major European companies are striving to publicly demonstrate their commitment to social responsibility and corporate ethics. In the case of L’Oréal explains that “By demonstrating high ethical standards, L’Oréal hopes to earn and retain the trust and respect of its employees, consumers, customers, suppliers and shareholders. In 2000, L’Oréal was one of the first large French companies to have adopted a Code of Business Ethics. Given L’Oréal’s international presence, a second edition of this Code was launched in 2007, drafted with the help of employees from 22 countries and available in 43 languages.”
M. Lulin asserts, “Quite simply, we believe that the global leaders of tomorrow are those companies who have not only integrated ethics into their strategic planning but also into their day-to-day business practices. At L’ORÉAL, we consider that ethics continues where rules end and that we should always ask ourselves not “can we do it” but “should we do it”. Ethics therefore allows us to earn and retain the trust of our stakeholders so that together we can grow and contribute usefully to the society in which we live.”
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Pfizer’s 2007 Report Details Approach to Serving Those Most in Need
Reporting method raises questions about whether the company is doing enough and what goals are realistic
Pfizer, one of the world’s largest pharmaceutical companies, plays key roles across the world in efforts to improve healthcare. Its 2007 Corporate Social Responsibility report covers a variety of topics, including its stance on access to medicine. The new report uses mainly qualitative explanations for its programs in this area and a review by EthicsWorld suggests that this is a prime reason for a lack of clarity with regard to the actual progress Pfizer has been made relative to its own declared standards.
As a research-based organization, a key portion of the report is devoted to its work in finding cures and treatments through research and development (R&D). The report cites a partnership with the World Health Organization to extend its work to tropical disease research, which mainly affects the poor. Pfizer views R&D to be a central part of its business practice, but the company also believes it can be a source of business innovation. By using the company’s existing capabilities to find new medications that will serve the needs of the sick, the company can contribute significantly to public health.
But, the constant criticism from civil society of major firms like Pfizer is that they price their products in ways that place far beyond the reach of the poor. To this concern, Pfizer reports on its investment in health. It cites numerous programs, in partnership with local and international non-governmental organizations, to help raise the capacity for strong health systems. “Mobilize Against Malaria” is a joint project between Pfizer, a number of NGOs and African governments; ConnectHIV is a program supported by local groups in the United States; and several disease management programs have been started in the U.S., the UK and Italy. Pfizer also focuses on effective delivery of medication, which is often thwarted due to poor infrastructure and lack of education. These programs support educational initiatives on disease treatment and prevention, build healthcare capacity, ensure actual delivery of medications and assist local organizations to treat patients on the ground. In some cases, medications are provided at lower costs.
Pfizer’s strategy is built around a motto it calls “Treat, Teach, Build, Serve.” Projects are designed to fit each component. Based on the projects featured in the report, Pfizer’s strategy appears to be focused more on capacity-building, such as bringing expertise and tools to developing nations, rather than a focus on bringing down the price of medication.
Much of Pfizer’s social initiatives are also based on donations. The company gives Difulcan, a medication that treats infections related to HIV/AIDS, for free to governments and NGOs to distribute. There are numerous patient assistance programs in the U.S. where those who cannot afford health insurance can get their medication for much cheaper prices. A chart in the report lists each program, how many people it helped and how much money they saved.
However, nowhere in the new report is there an explanation of whether or not Pfizer met its own goals, or what it proposes to accomplish in the future. There is no mention of how its programs match up to the work of other organizations. Neither is there a discussion of any challenges the company faced, or currently faces, according EthicsWorld's view.
Oxfam released a report last year saying pharmaceutical companies need to do more to help poor people afford medication, and seriously criticized companies for what Oxfam called “patent abuse.” Pfizer does address its position on patent use, arguing the need for protection against counterfeit drugs that could compromise safety. However, despite the long list of projects Pfizer has participated in, it is unclear to the reader of the new report whether or not the company is doing enough.
Please see the new 2007 CSR Report from Pfizer.
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Nike Provides an Honest Assessment of Supply Chain Management in China
Nike’s China supplement to its latest CSR report offers a transparent look into a country that is receiving a lot of attention in the run-up to the 2008 Beijing Olympics
China is Nike’s second largest market after the United States, and with the international attention that will descend on the country for the 2008 Beijing Olympics, Nike has produced a China supplement to its general CSR report focusing on how it can better manage its relationships with manufacturing contractors in China. The report itself is heavily text-based and shows real signs that Nike is honestly assessing the many challenges the company faces. The report covers a number of different areas, but most likely due to Nike’s poor reputation for factory conditions in the past, the majority of the report is focused on how the company is attempting the overcome challenges to ensure good practices are carried out in Chinese factories.
Nike has had a long history in China, and maintains a strong relationship there. Nike contractors employ more than 210,000 workers and about one in three pairs of Nike shoes are made in China. According to the report, “improving conditions for workers throughout our global supply chain continues to be one of our greatest priorities.”
The company has set a goal for itself to set the industry standard on factory conditions. The Nike 2005 report was the first to disclose its entire supply chain, and the most recent report disclosed details on monitoring tools used and procedures that are followed in keeping contractors accountable. Nike’s strategy toward its factories in China is based on understanding root causes of problems that arise and effecting systemic change in the industry. The results of external audits which follow is fairly strong evidence that Nike is taking this strategy to heart.
Based on a number of audits, both internal and external, Nike found some disconcerting practices:
- Inadequate systems are in place to enforce the Code of Conduct
- A lack of knowledge and training around compliance
- Insufficient communication both internally and externally
- Falsification of factory documents (the biggest factor that could potentially contribute to child labor, Nike says)
- Low industry expectations
- High worker turnover
In each case, Nike recognizes the real challenges it has to face but also demonstrates on many levels how the company is working with contractors to “build their capacity to change.” Overall, Chinese factories rank on par with other global factories on general worker safety but ranked somewhat lower in fire/emergency and health, according to the report. Maintaining transparency in the supply chain is the most difficult challenge, Nike says, but a factory remediation program has been put in place to help factories get back on track.
In other areas of CSR,
- Nike is focused on using environmentally preferred materials and minimizing waste in its design
- Nike is requiring its suppliers to abide by stricter standards for water and waste management.
- Nike has set a goal that by 2011, Nike-brand facilities and business travel will be carbon neutral. The challenge still remains to get Chinese contractors on board.
- Nike’s community investment initiatives focuses on including excluded youth in sport under the “Let Me Play” initiative
To learn more about Nike's CSR work, go to the Nike Responsibility website.
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The Challenges of Corporate CSR Reporting
Nestle’s Creating Shared Value – True CSR or Just Good PR?
Leading global corporations are subject to mounting external pressures to publish detailed corporate social responsibility reports. Shareholder groups and civil society organizations are pressing firms to divulge exactly how they are performing in an increasing number of areas. Companies are also increasingly finding that taking CSR initiatives can do a great deal to boost their own reputation, which is why programs such as those promoted by the United Nations Global Compact, Business for Social Responsibility and the Global Reporting Initiative are gaining in popularity and respect.
But as each new glossy and ever-more detailed CSR report is published, so the question constantly surfaces: are these credible and accurate reports, or little more than public relations exercises?
Many organizations have tried to track trends in sustainability reporting and objectively rank companies on how well they report (see EthicsWorld CSR Surveys and Trends). These publications do help to sift through some of the fluff, but evaluating whether a company does what a company says remains a daunting task.
Nestle, the giant global food company headquartered in Switzerland, has released its CSR report Creating Shared Value.
The report takes on a wide variety of issues developed by a company that works with leading organizations like SustainAbility and AccountAbility. Nestle was one of the first food companies to help the Global Reporting Initiative develop a global reporting standard and indicators on sustainability in the food sector. It participates in such initiatives as the UN framework to tackle climate change and the International Cocoa Initiative. But despite Nestle’s positive credentials, advocacy groups like Baby Milk Action and Corporate Watch continue to be critics and challenge the credibility of the company’s reporting.
Nestle’s report covers four areas it deems to be the most important – Manufacturing and Environmental Footprint, People, Agriculture and Rural Development, and Products and Consumers. There is a description of current projects and accomplishments in each area, along with a “key challenge” to which Nestle then responds with its objective.
Manufacturing and Environmental Footprint
- 18% of its factories have been certified, and its goal is to have 100% certified by 2010.
- 84% of its factories are audited by an external network, called CARE.
- Since 1998, water usage was reduced by 28% and a goal was set to reduce water 2-3% over the next five years.
Key Challenge – Sustainable water use
Response – Nestle is increasingly trying to improve water management outside its direct operations.
- The company is working towards external certification of all of its factories.
- Nestle complies with International Labor Organization conventions, but it regrets that in 2007 there were 15 work related fatalities
- Developing talent is a major initiative to bring in order to maintain a competitive workforce
Key Challenge – Empowering high performing teams
Response - Nestlé continuously promotes a culture of engagement and performance to increase customer satisfaction and reduce absenteeism.
Agriculture and Rural Development
- Milk production factories are growing.
- There is a renewed focus on sustainable productivity in the coffee and cocoa areas. Nestlé will receive Common Code for the Coffee
- Community (4C)-verified coffee in 6 of its coffee factories by the end of the first quarter of 2008.
Key Challenge – Biofuels
Response - Nestlé believes that decisions about energy sources must be based on cost–benefit and life-cycle analysis, and should consider their full social and environmental impact, including the effects on food prices and water.
Key Challenge – Water management in agriculture
Response - Nestlé is a vocal public advocate for access to clean drinking water, and has made considerable efforts to share knowledge and best practice on agricultural water use and protection.
Products and Consumers
- Major focus on nutrition in food products, which has been a source of higher profits
- Nestle is starting programs in countries such as Brazil to provide affordable, nutritional products to low-income consumers
- It is the largest single baby food market worldwide.
Key Challenge – Tackling obesity
Response – Nestle lays out six-pronged response as a strategic approach to this health worldwide health problem.
Nestle’s accomplishments in its key CSR areas are detailed in the report, but the text falls short when it comes to admitting problems and difficulties in meeting goals. Articles from outside sources, notably advocacy NGOs, highlight the shortcomings, but these too raise questions about objectivity at times and so makes the challenge of determining the reliability of corporate reports all the more complex.
An article from Baby Milk Action, for example, criticizes Nestle for aggressively marketing baby foods, trade union busting, failing to act on child slavery in its cocoa supply chain, depleting water resources, among other concerns. The group’s primary allegation is that Nestle has violated the baby food marketing requirements adopted by the World Health Assembly and conducts faulty audits. It has been critical of Nestle for many years.
An article in the Sydney Morning Herald expressed the same concerns over Nestle’s “aggressive marketing tactics.” According to the article, “under an agreement by the Manufacturers of Australian Infant Formula, companies may not advertise formula for children under 12 months as it has been shown to reduce breastfeeding rates.”
Corporate Watch has highlighted Nestle’s questionable marketing schemes in promoting its bottled water and the company’s impact on public water sources.
EthicsWorld seeks to assist companies and organizations to better understand the challenges of CSR reporting and continues to highlight reports by major firms and comments by leading NGOs. Keep monitoring our site for analysis on how companies are addressing this sticky issue.
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BHP Billiton Delivers on Forthright and Comprehensive CSR Reporting
BHP Billiton 2007 Sustainability Review is an example of a company that is striving to answer the call of its stakeholders for complete transparency in its reporting. In the resource extraction industry, in particular, many risks are involved. There is increasing pressure on companies within this industry to report on worker safety, health conditions, community involvement, and governance practices. BHP Billiton provides a comprehensive of all these activities.
The 2007 Sustainability Review outlines what BHP Billiton sees as “its shared responsibility,” or those areas in which it believes it has a significant role:
- Understand emissions from the full life cycle of its products
- Improve the management of energy and greenhouse gas emissions across business
- Support the development of low-emissions technology and internal energy excellence projects, and encourage emissions abatement by employees and local communities
- Contribute to public policy development
New in 2007, BHP conducted a comprehensive review of its governance approach after allegations were made in 2006 that BHP Billiton Petroleum made a payment for a shipment of wheat to be delivered to Iraq in 1996 (allegations were found to be unsubstantiated by internal and external reviews). Improvements that resulted from the review were implemented in 2007:
- Implemented a framework for operating effectively and ethically in countries where the standards of governance and conduct are less mature
- Adopted universal criteria for community investment programs
- Amended certain policies to ensure relevant business conduct and governance considerations were thoroughly incorporated
- Enhanced recruitment practices and standard recruitment contracts
The year 2007 also marked the end of BHP Billiton’s five-year target initiative, in which it set five-year goals in six areas of corporate social responsibility. The report provides a chart concerning the company’s performance in these six areas:
“Zero Harm” on operating sites:
Targets met – no violations of human rights, no significant environmental incidents
Needs improvement – eight fatalities, paid $231,700 in legal fees
All targets met – 100 percent of self-assessments were completed at operating sites, risk registers were implemented at 100 percent of required sites and businesses
Targets met – 97 percent of sites have a baseline survey as part of health surveillance programs
Needs improvement – no reduction in potential occupational noise exposure, occupation illness went up by 17 percent from the base year
Needs improvement – classified injury frequency rate went down by 36 percent, instead of the target reduction of 50 percent
Surpassed targets – reduced greenhouse gasses by six percent, over a target of five percent, reduced hazardous waste by 50 percent, over a target of 20 percent
Needs improvement – freshwater consumption was reduced by four percent, not the target of 10 percent reduction, general waste was reduced by three percent, not the target of 20 percent reduction
Surpassed target – aggregate contribution to community programs surpassed target of 1.1 percent of pre-tax profits on a three-year rolling average, which was above one percent target
In addition to these areas, BHP Billiton also publishes its responses that address, in realistic terms, each of the following areas:
- Eliminating fatal risks
- Occupational and community health
- Greenhouse gas emissions
- Access to and management of resources
- Sustainable community development and closure
BHP Billiton is a global leader in the resources industry with highly diverse commodities and markets. Headquartered in Melbourne, Australia, BHP Billiton has 39,000 employees working in more than 100 operations in 25 countries.
To read the report in more detail, click here for the .pdf version.
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Rio Tinto’s Candid Sustainability Review Sets An Industry Standard
The 2006 Sustainability Review establishes an ambitious set of goals in numerous corporate social responsibility areas, such as the environment, society, economic performance, and governance. Rio Tinto Chairman, Paul Skinner, makes the case that “By committing ourselves to implement the principles of sustainable development we can make this long term [economic] stability more likely. This approach also opens up new opportunities, enhances our business performance and helps make Rio Tinto a first choice of partners around the world.”
The company’s Sustainable Development Leadership Panel developed a rigorous strategy to meet the high goals it had set. Within the past year, the company has aligned with Application Level A+ of the new generation (G3) of Global Reporting Initiative guidelines. The areas in which Rio Tinto most want to focus, according to CEO Leigh Clifford, are: the creation of a company culture centered around sustainable development that mirrors the company’s already high concern for safety, development of key performance indicators, more effective lines of communication, tighter supply chain management, and a sustainable development strategy that focuses on future mining endeavors.
In assessing their progress in key CSR areas, Rio Tinto developed a chart that shows the areas where progress is strong and where it still needs to improve.
Employment goals (Some improvement needed):
Women Representation -
TARGET: Increase the representation of women in senior management to 20% by 2009 from a 2004 baseline
RESULTS: Women now represent 20% of identified “future leaders” and currently 6% of senior management
Safety Targets (Overall progress, significant improvement in fatalities needed):
Injury Frequency Rate -
TARGET: A 50% reduction in lost time injury frequency rate (LTIFR) between 2003 and 2008
RESULTS: 11% improvement in LTIFR compared with 2005
TARGET: Zero fatalities
RESULTS: Three fatalities, compared with two in 2005
Health Targets (Overall progress, significant improvement in noise environment needed):
Occupational Health Standards -
TARGET: Full implementation of occupational health standards
RESULTS: 96% of operations have implemented our occupational health standards. Corporate offices, projects and new businesses continue to implement the standards
Noise Environment -
TARGET: A 20% reduction in number of employees (per 10,000 employees) exposed to a noise environment of more than 85 decibels between 2004 and 2008
RESULTS: A 1% reduction from a 2004 baseline.
Human Rights and Political Involvement Targets (Overall progress):
TARGET: No breaches of Rio Tinto’s policies for human rights and political involvement
RESULTS: No reported breaches of our policies in 2006
Community Relations Targets (Overall progress):
TARGET: Site managed assessments (SMA) done at all operational sites by the end of 2008
RESULTS: Lessons learned from pilot projects have been applied and will be included in a rollout of the SMA process across the Group in 2006
Environment Targets (Inconsistent):
Freshwater Usage -
TARGET: A 10% reduction in freshwater withdrawn, per tonne of product, between 2003 and 2008 since 2003
RESULTS: Overall progress was made, the freshwater withdrawn efficiency has improved by 11.5%
Energy Usage -
TARGET: A 5% reduction in energy used, per tonne of product, between 2003 and 2008
RESULTS: Some improvement needed, where energy efficiency has improved by 2.6% since 2003 but has slipped slightly compared with performance in 2005
Greenhouse Gas Emissions -
TARGET: A 4% reduction in total greenhouse gas emissions, per tonne of product, between 2003 and 2008
RESULTS: Significant improvement needed, where greenhouse gas efficiency has improved 0.3% since 2003 but has slipped compared with performance in 2005
To read a more in-depth analysis of what Rio Tinto is doing to improve their sustainable development strategies and meet all of their goals, click here for the .pdf version.
Rio Tinto is one of the world's leading mining and exploration companies based in the United Kingdom.
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COCA-COLA Claims Improvements In New Corporate Social Responsibility Report
Coca-Cola released its 2006 report, which highlights its work on the environment and workplace ethics. The report details the company’s compliance with GRI standards and the 10 principles of the UN Global Compact.
The report, published on September 4, 2007, covers the company’s performance from January 2006 through July 2007. At the outset of the new document, E. Neville Isdell, the Chairman and CEIO states: “As we create value for our shareowners and other stakeholders by running a successful business, we must also be a force for positive global change — one community at a time. We must help create economic and social value, protect the environment and contribute to the long-term sustainability of every community we serve.”
The report includes an overview summary chart that highlights progress made and includes a self-assessment rating. In the area of Workplace & Human Rights, it claims significant progress and notes such actions as: launched global Workplace Rights Policy and Human Rights Statement in January 2007; trained managers in multiple departments on our Workplace Rights Policy; endorsed the Employment Nondiscrimination Act in 2007 — one of the first 10 companies to endorse its enactment.”
It considers its progress on Ethics & Compliance in 2006 to have been excellent and noted such actions as: over 63,000 Ethics and Compliance training sessions completed by associates from January 2006 to July 2007; trained associates on Code of Business Conduct, European Union competition law, Latin American competition law, financial integrity, intellectual property and competitive intelligence, drug-free workplace and preventing workplace violence; rolled out an updated global anti-bribery compliance program in 2006 with supporting policies, training and audits; expanded its compliance program around United States trade sanctions in 2006 with supporting policies, training and audits.
For many people, Coca-Cola’s performance with regard to water issues and product packaging are likely to be of greatest importance in the social responsibility area. Here, the summary tables include, for example:
Water Use Ratio (Efficiency) (significant progress) with, for example, 2.52 liters/liter of product in 2006; 3% improvement since 2005; 19% improvement in water use ratio since 2002, when it first reported the ratio externally; commitment to establish water use efficiency goals for global operations by 2008.
Total Water Use (significant progress) with 288 billion liters used overall in 2006 - 6% decrease since 2002; pledge to replace the water it uses in its beverages and their production; however, changes in the product mix may result in more water-intensive (though not less efficient) operations;
Wastewater Treatment Compliance (moderate progress) with 83% compliance in 2006 with its own strict internal standards, which meet and often exceed applicable laws; increase of 2% since 2005; target to return to the environment 100% of wastewater used in more than 800 plants in the Coca-Cola system at a level that supports aquatic life by the end of 2010.
Sustainable Packaging (moderate progress) with approximately 97% of the global unit case volume in 2006 was delivered in refillable, recyclable or bulk primary packaging systems; redesigned packaging to use fewer raw materials, including its contour glass bottle, with which the company saved 89,000 metric tons of glass in 2006; investment in a PET bottle-to-bottle recycling plant which opened in Austria in 2007; launch of a global packaging data management system to better assess environmental performance.
Corporate Social Investment (CSI) (moderate progress) with $70 million in global CSI in 2006 with the distribution approximately: community and economic development, $25 million; higher education, $20 million; culture and arts, $13 million; other, $7 million; health and social services, $3 million; environment, $2 million.
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Baxter International Inc. Releases 2006 Sustainability Report
American healthcare company, Baxter International, Inc., recently released its 2006 Sustainability Report, which for the first time outlines its broad, long-term sustainability efforts. The sustainability priorities fall into three broad categories: Baxter's employees, its operations and products, and the world in which the company operates. Areas of focus include Baxter's workplace, supply chain, ethical conduct and legal compliance, impact on the environment, as well as access to healthcare and education.
Performance highlights from the 2006 report include:
- Continued work with health authorities around the world in the development and production of a candidate H5N1 vaccine to protect citizens in the event of an avian flu pandemic;
- Making Baxter corporate headquarters in Deerfield, Illinois, a "carbon-neutral" facility, thereby offsetting 100 percent of the greenhouse gas emissions associated with electricity and natural gas at the campus with renewable, clean energy;
- Significant progress achieved against the company's environmental, health and safety goals, including a 9 percent reduction in water usage and a 5 percent reduction in energy usage and greenhouse gas emissions per unit of sales;
- The earning of a "Green-e" label - the first in the medical industry - for Baxter's new AVIVA intravenous solution container. Baxter purchased renewable energy certificates to offset 100 percent of the greenhouse gas emissions associated with the electricity to manufacture AVIVA; and
- Total giving by Baxter and The Baxter International Foundation in excess of $35 million, including product donations, cash contributions and foundation grants.
Employee engagement has significantly increased since 2005. Baxter regularly conducts employee surveys to gage the company’s performance. Baxter administered the 2007 survey in 16 languages in online and paper formats. More than 38,000 employees completed the survey, representing 85 percent of the organization, compared to 55 percent in 2005. Here are the 2007 survey results:
Sustainability within the supply chain is a key commitment. During the first half of 2005, Baxter recruited suppliers to participate in the Green Suppliers Network, holding invitational meetings with eight key U.S. suppliers. By March 2006, five suppliers within the healthcare sector had completed the review process, four recruited by Baxter. The review process identified the opportunity for these suppliers to reduce water use by 5.7 million liters, decrease waste generation by 91 metric tons and save 189 gigajoules of energy per year. Potential annual cost savings are estimated to exceed $8 million. Most projects, such as the one California-based Medegen Medical Manufacturing Services undertook, have been implemented. Three other Baxter suppliers plan to participate and their reviews are underway. Baxter is encouraging more suppliers to join.
As with last year’s report, Baxter also highlights its key challenges in the health care field. Ensuring patient safety, expanding access to care, improving product quality and supporting public health all remain areas of focus for Baxter globally.
With the help of an outside auditing service, Baxter recognized the need for improvement in employee attendance. Baxter's cases with days lost rate performance worsened by three percent compared to 2005. This metric describes work-related injuries or illnesses that cause an employee to lose at least one full day after the date of the incident. In order to address these performance challenges, the company has initiated “Reengineering Baxter's hazard identification and risk assessment process”. These activities help facilities prevent occupational injuries and illnesses by identifying work-environment hazards, assessing risks and prioritizing action plans to address those risks. Current efforts focus on the following areas of concern:
- Educating employees at all levels on the distinctions between risk, hazard and control;
- Reducing Baxter's overall risk profile through process improvements; and
- Engaging facility-level employees and supervisors to establish their accountability for the process.
The Chairman and CEO of Baxter International, Robert Parkinson, Jr., strongly advocates good corporate citizenship. Two major challenges he recognizes are supporting the U.S. educational system, particularly in math and science, and healthcare reform. Given its unique expertise, Baxter could play a very effective role in helping the government shape its policies in these areas.
Baxter International is a global diversified healthcare company that develops, manufactures and markets products to treat hemophilia, immune disorders, infectious diseases, cancer, kidney disease, trauma and other chronic and acute medical conditions. The company has been recognized by Innovest Strategic Value Advisors as one of the Global 100 Most Sustainable Corporations in the World, by Corporate Responsibility Officer magazine as one of the 100 Best Corporate Citizens in the United States and by Ethisphere magazine as one of the World's Most Ethical Companies. Baxter is a member of the Center for Corporate Citizenship at Boston College, the Business Environmental Leadership Council of the Pew Center on Global Climate Exchange, the Chicago Climate Exchange, the U.S. EPA's Climate Leaders, the Ethics & Compliance Officer Association and Hospitals for a Healthy Environment. Baxter endorses the Ceres principles and is an organizational stakeholder of the Global Reporting Initiative.
To read more about Baxter's sustainability activities, click here.
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General Electric Releases New Corporate Citizenship Report
GE sets a high global standard by highlighting initial 2006 commitments, reporting on progress and underscoring 2007 objectives. The central message is that progress in all areas of corporate citizenship builds a stronger global corporation.
GE, headquartered in the United States, has annual global revenues in excess of $160 billion and employs more than 300,000 people. Here EthicsWorld looks at a series of the key elements in the GE report published on June 25, 2007:
- Chairman’s Perspectives
- Integrity Culture
- Framework of Report
- Stakeholder Input
- Human Rights
- Military Products Disclosure
Writing at the front of the report, Jeffrey R. Immelt, Chairman and Chief Executive Officer, noted that, “As we expand in developed and emerging markets, we will be continually challenged to ensure that we invest in a sustainable and intelligent way that leverages our financial, technical and intellectual resources to the benefit of our investors, employees and communities. To some, this may seem incongruous for a public company like GE whose primary mission is to make money and deliver value to investors. We don't agree. Many of our growth platforms focus on addressing some of the world's most complex challenges, especially as they relate to emerging markets such as India, China or Latin America. The challenges of global warming, water scarcity and energy permeate these markets in nearly every part of the world. Our early experience with ecomagination has shown us that we can develop products to address these challenges and make money in doing so. This also reflects a growing consensus among our customers that they value technology that can preserve the environment and achieve productivity at the same time.”
Mr. Immelt asserted that, “Our corporate citizenship must be aligned with our business goals in order to drive future growth and better understand and mitigate these risks. This alignment also helps us deliver on our promises while answering the needs of society. Over the past year, we greatly increased our dialogue with NGOs, members of government, community representatives and social welfare organizations... As GE brings to bear its culture of integrity and innovation in communities we serve, our expectation is that we can help to improve the quality of life for citizens, our employees and our investors.”
At the core of GE’s citizenship approach, according to the report, is a corporate culture based on integrity. The report stated, “GE’s integrity program is founded on the bedrock principle that business leaders, including the Company’s most senior leaders and including any person who manages other employees have no greater responsibility than to uphold GE’s compliance culture. GE leaders must proactively build and maintain an unassailable culture of integrity that pervades the business, one that requires an unwavering commitment to the laws and regulations, and expects fair, honest and trustworthy behavior from GE employees in all their GE activities and relationships. GE leaders are also required to excel at anticipating and managing legal and regulatory risks. Leaders are expected to develop an early warning mindset and closely examine “business-as-usual” practices for sources of unanticipated risk.”
The report highlighted the fact that GE’s policies establish rules of integrity for employees in areas ranging from doing business with governments to working within supplier relationships. These principles, codes and policies seek to foster ethical behavior by GE employees as they transact business and serve their communities, thereby advancing human rights.
Moreover, the report stressed that GE expects suppliers to obey laws that require them to treat workers fairly, provide a safe and healthy working environment and protect environmental quality. GE sets expectations for its suppliers regarding environment, health, safety and employment practices and conducts on-site inspections of many suppliers, mostly in emerging markets. A section of the new report explains in some detail the approaches that GE takes here and the progress that it has made.
FRAMEWORK OF REPORT
GE’s Citizenship report essentially embraces four broad areas:
• Ecomagination (covering many aspects of environmental protection).
• Compliance & Governance (including anti-money laundering and anti-corruption).
• Environment, Health & Safety (relating to many aspects of corporate products, services and relationships with customers and suppliers).
• Emerging Markets (GE has greater sales outside of the United States than within, and according to the report, it sees very substantial corporate expansion in emerging markets where it recognizes a broad range of particularly important challenges, from the environment to human rights).
Within these four areas, the report covers what are called “Key citizenship priorities” that range from sales to military, security and human rights (including employee safety), ethics and anti-corruption efforts in emerging markets, to environmental management issues, including air quality, climate change (both in relation to the development of product solutions to address this topic and the energy efficiency of our operations), and releases of hazardous substances to the environment.
The report emphasized that in the course of 2006 GE held a large number of meetings and consultations with external stakeholders across the world. It said that these discussions enhanced corporate learning, policy formation and decision-making processes. It said, for example, that in the area of human rights, it sought the views of various stakeholders to gain broader understanding of what expectations GE would face as it developed and finalized its Statement of Principles on Human Rights in 2006. GE held stakeholder meetings in New York, Brussels and Hong Kong to invite commentary on GE’s 2006 Citizenship Report and to gauge reactions to certain human rights aspirations being considered for inclusion in GE’s new statement on human rights.
GE said that, “Reporting stakeholder feedback, including feedback from our new Stakeholder Report Review Panel, led to our commitment to produce an annual best-in-class” citizenship report. Current-year reporting improvements include increased disclosure around project finance, responsible lending, human rights and global diversity. Stakeholder engagement also fed directly into the introduction of the materiality analysis process.”
Ecomagination is the word invented by GE to highlight its efforts in every business area to offer customers products and services that improve environmental performance while driving growth for the company. The report noted that its 2006 commitments in this area included:
• Double investment in R&D—GE is increasing financial support of its research in cleaner technologies from $700 million in 2005 to $1.5 billion in 2010
• Increase revenues from ecomagination products.
• Reduce greenhouse gas (GHG) emissions and improve the energy efficiency of GE’s operations.
• Keep the public informed.
(Comment from EthicsWorld: A substantial section of the report explains the approaches and the progress made on these commitments, including extensive consultation with external stakeholders. The report in this area, as in others, does not highlight failures, or lessons learned from unfortunate experiences, nor does it include clear criticisms from external groups. While the detail in the report is formidable and the argumentation credible, the inclusion of lessons learned from errors of the past and outstanding criticisms today would enhance the quality of the main body of the report’s text. However, a noteworthy insertion relates to errors in past statement, which GE highlights – see Military Disclosures below.)
GE’s report goes substantially further than does similar citizenship reports by many other companies in highlighting the core importance of human rights corporate policies.
In the course of 2006, GE developed a Statement of Principles on Human Rights. The report noted that, “Our Spirit & Letter integrity policies address key human rights topics such as non-discrimination, anti-money laundering, anti-corruption, and environment, health and safety. We actively promote two-way communication through our ombudsperson program to align our actions with our policies.”
GE said that whether in established or emerging markets, GE’s commitment to human rights extends to employees, suppliers and communities wherever it conducts business. It asserted that “Our Commitment” as a business enterprise is “to promote the advancement of fundamental human rights. We support the principles contained in the Universal Declaration on Human Rights, mindful that it is primarily addressed to nations but understanding that business has an important role to play. GE has joined with other companies to find practical ways of applying, within the business community, the broad principles established in the Declaration.”
The report emphasized that its human rights approaches start with its own employees. Here GE said it has adopted the ILO’s Declaration on Fundamental Principles and Rights at Work and this includes the ILO’s four human rights principles in the Company’s Fair Employment Practices policy: non-discrimination, prohibitions against child and forced labor, and freedom of association and collective bargaining under applicable law.
In addition to these principles, the report noted that GE employees must adhere to a Code of Conduct requiring them to:
• Be honest, fair and trustworthy in all of their GE activities and relationships.
• Avoid conflicts of interest between work and personal affairs.
• Foster an atmosphere in which fair employment practices extend to every member of the diverse GE community.
• Strive to create a safe workplace.
• Protect the environment.
• Sustain a culture where ethical conduct is recognized, valued and exemplified by all employees.
Military Product Disclosure
GE stated in its report that, “In preparing for the 2007 Citizenship Report, GE’s Legal and Corporate Citizenship teams became aware of an inaccurate statement concerning one application of a product. The 2005 and 2006 GE Citizenship Reports discussed product-specific issues, including the statement ‘GE is not involved in any way in land mine or cluster bomb production and does not make these devices, nor sell parts or components for use in production of these devices.’ However, a recently acquired business unit is presently supplying a sensor for use by a U.S. manufacturer of a next-generation cluster weapon for supply to the U.S. military.”
“The sensor was developed for and is used extensively in cardiac diagnostic and corrective procedures. Thousands of day-to-day medical procedures worldwide utilize this sensor to monitor temperature changes in the surrounding medium (in the case of heart catheterization, the medium is saline). A fraction of the sensors developed for the medical application are set aside and modified slightly for use by and shipped to the customer, who then integrates the sensor into each individual munition within the cluster bomb. GE acquired this product when it purchased Thermometrics in 2001. The product is manufactured today by GE Sensing & Inspection Technologies, headquartered in Billerica, Massachusetts. The business unit forms part of the GE industrial family of businesses. In 2005, sales of this sensor generated less than 0.001% of consolidated GE revenues. Of more than 250 million sensors produced each year, only 15,000 are used for this application.”
“This issue highlights the data-gathering challenges that the Company faces due to its size and complexity. Conversely, this is a perfect example of how the citizenship report development process—in only its third year—is helping overcome structural barriers to identify gaps between stated policy and practice.”
Next steps: GE said it has taken a number of corrective actions. “The business will not accept any new orders for products used in this type of application and will not renew the contract at the end of 2007. More important, we examined the steps taken to date to ensure that the statements in this report are accurate and reflect a living commitment by the GE businesses. In 2007, GE businesses will review corporate citizenship commitments as part of the regular Session D, compliance-review process. GE is also launching a new Company-wide review process that will be rolled out to new acquisitions going forward, allowing us to review and strengthen our acquisition integration processes. We remain committed to a rigorous fact-checking process for this report.”
See the full report.
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2006 Corporate Citizenship Report
A characteristic of the new report released on May 23, 2007 by one of the world's largest multinational corporations is its confidence. There are few sentences that suggest any doubts, or any corporate weaknesses. The report starts by stressing how good ExxonMobil is by noting:
- Industry-leading workforce safety record, at lowest-ever level
- A record low number of oil spills, continuing our industry leadership
- CO2 emissions reduction of about 8 million metric tons last year alone as a result of energy efficiency improvements since 1999.
- Avoided global CO2 emissions of 10.5 million metric tons annually as a result of continued investments in energy-efficient cogeneration capacity.
- Rolled out the Framework on Security and Human Rights to all ExxonMobil operated affiliates.
New additions to the 2006 report include a description of the company's approach to identifying and prioritizing the corporate citizenship issues that are most material to the Corporation, an extensive presentation of the company’s approach to the risk posed by rising greenhouse gas emissions, and efforts to strengthen and build capacity in the communities in which the company operates around the world. The report also includes a comparative performance data table for the years 2003-2006.
Rex W. Tillerson, Chairman and CEO of ExxonMobil states in the company’s new 2006 Corproate Citizenship Report that, “We are proud of our record of corporate citizenship, and look forward to building upon this record of accomplishment in the future.”
The following is an excerpt from his introductory statement to the new report:
“ExxonMobil applies a rigorous approach to corporate citizenship in all aspects of our business, everywhere we operate. Our corporate-wide management systems are designed to ensure that citizenship is directly integrated into our business practices and processes, so that expectations for citizenship performance are met in every part of our global operations. Operating ethically and responsibly is ingrained in our business culture and monitored, enforced, and improved upon through our globally-deployed Standards of Business Conduct and Operations Integrity Management System (OIMS).
Our Standards of Business Conduct form the framework by which we operate around the world, providing each employee with guidelines for managing day-to-day compliance with the Corporation’s Standards.
OIMS provides the framework for managing safety, health, security, and environmental risks at all our facilities. ExxonMobil’s business model—which demands high standards of integrity, legal compliance, governance practices, and management control
systems—is key to achieving long-term sustainable performance and good corporate citizenship.
This Corporate Citizenship Report details our 2006 performance. In addition to communicating our approach to global climate change, we describe our policies and performance in maintaining our industry leading health and safety performance; our programs to recruit and train a talented and diverse workforce; our commitment to engage with a wide variety of groups; and our efforts to strengthen and build capacity in the communities in which we operate around the world.”
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HP Global Citizenship Report 2006
Report highlights new priorities for 2007, added privacy policies
In March 2007, Hewlett-Packard (HP), the information technology company, released its Global Citizenship Report for the 2006 fiscal year. The report, which covers ethics and compliance, supply chains, energy efficiency, product reuse and recycling, products, operations, privacy, employees, and social investment, contains a detailed section on privacy likely reflecting this years board spying scandal at the California-based company (see Corporate Reputation). The report emphasizes the company’s 2006 review of its global citizenship strategy and the revisions it made in priorities for the coming year.
According to the report, HP conducted a 2006 review of its global citizenship strategy and revised its priorities for this year replacing its emphasis on increasing access to IT globally with a newly increased focus on product reuse and recycling. The company will continue to keep energy efficiency and supply chain responsibility on its list of top three global citizenship priorities.
The following are excerpts from the report:
Supply Chain Responsibility
In 2006, HP spent approximately $50 billion on materials, manufacturing and transportation, in one of the IT industry's largest supply chains….Investing in supply chain responsibility meets stakeholder expectations, protects our reputation and decreases risks to HP from inadequate supplier standards. We were the first IT company to implement a Supplier Code of Conduct. We conduct site visits and supplier audits, follow up to drive continuous improvement in supplier standards, and collaborate on capability building projects to support the implementation of our Supplier Code of Conduct. We will largely complete auditing our high priority supplier sites in 2007 and audits will cumulatively cover more than 300,000 workers engaged in manufacturing HP products.
Rising energy prices, concerns about energy security and increasing pressure from society to reduce greenhouse gas (GHG) emissions related to fossil fuels, have heightened the demand for energy efficiency and renewable energy sources. Customers are increasingly concerned with the cost of energy and the energy consumption of IT equipment... In 2006, we adopted new goals for product energy efficiency and internal energy use.
Product Reuse and Recycling
More than 200 million new PCs are bought each year worldwide. Many of these (and other IT products such as printers and servers) replace existing equipment). As one of the world's leading suppliers of IT equipment, we can play a major role in reducing the environmental impact of IT products, beginning with their design, which makes reuse or recycling easier. We offer effective and responsible take-back systems and work with others to develop sound regulatory approaches. We are on target to achieve our long-term goal of recycling 1 billion pounds since our product recycling program began in 1987.
This table shows some of our current and future goals in each of our three priority areas. See each section for more information.
Recent events related to the use of pretexting on behalf of HP may have undermined confidence in our commitment to privacy.
The methods that were used to uncover the source of confidential information leaks within our Board were inconsistent with HP's values and decades of ethical behaviors. This was an unfortunate departure from normal behavior. Our commitment to privacy remains strong and undiminished. It has alerted us, however, to a need for the right procedures at all levels within HP to ensure that we meet privacy expectations and has shown us opportunities to strengthen our commitment further....
After the events of 2006, we began a process of clarifying and strengthening our (privacy) policy:
- Board members are now more clearly accountable for upholding our privacy policies.
- Privacy training and orientation have been expanded to include the board of directors.
In 2006, we strengthened our privacy governance and implementation processes by:
- Expanding our Chief Privacy Officer's (CPO) role through formal membership in our Standards of Business Conduct Compliance Council and the Ethics and Compliance Committee.
- Ensuring that employees conducting internal investigations consult the HP Privacy Office in appropriate situations, depending on the type of data to be acquired, the method of acquisition, who will have access and the extent of international data transfer.
- Giving our CPO formal responsibility for raising any concerns with senior executives.
We will create a separate code of conduct that addresses privacy and business ethics, for use by outside investigators. In addition, HP has numerous internal tools to help us implement our privacy policies. Among them are:
- Privacy Impact Assessments – help ensure new sales and marketing programs meet legal and HP privacy requirements.
- Online Interactive Rulebook – helps employees review privacy rules and function-specific guidelines and templates.
- Dedicated websites – provide self-paced support and assistance to field employees and management.
- IT Application Development Questionnaire – enables system developers to assess privacy compliance for all IT systems that handle employee data.
All HP employees are required to take HP's annual privacy training. In 2006, more than 125,000 employees completed this privacy training.
We will again train employees on our privacy policies in 2007, as well as provide:
- Ethics and privacy training for the board of directors and senior executives
- Privacy training for contractors who may store or process personal information
- We monitor compliance with our policies through:
- Customer and employee feedback submitted online, by post or by phone
- HP privacy team compliance reviews and assessments
- Privacy audits, which extend to suppliers
Privacy Goals for 2007
- Have 80% of HP workforce complete updated Standards of Excellence Data Privacy training.
- Further embed HP privacy standards in business processes, IT systems and supplier selection.
- Implement improved privacy guidelines for investigations.
- Establish an online tool for employees that incorporates all privacy implementation standards.
- Advocate for stronger U.S. Federal privacy legislation and industry-wide adoption of an accountability-based privacy model.
- Roll out Design for Privacy training for technical and product development employees.
For the full report visit HP's website.
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Starbucks' Corporate Social Responsibility 2006 Report
In March 2007, US coffee company Starbucks, known as a pioneer in CSR reporting, released the abridged version of its sixth annual Corporate Social Responsibility Report (the full version will be released March 21, 2006). The report expands on the CSR sections of Starbucks' Fiscal Year 2006 Annual Report (see below for earlier coverage), in part by delving deeper into the metrics the company uses to measure its progress on social responsibility issues.
The report is divided into several sections each covering major CSR concerns for the company: coffee, the environment, social issues, health and wellness, and the workplace. Perhaps the most striking aspect of the report is its introduction, which takes a graphical, metrics-based approach to CSR by using two charts to depict Starbucks CSR goals and progress over the last year.
For the full abridged report click here.
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International Council on Mining and Metals
Releases Sustainability Report
On February 28, 2006 the International Council on Metals and Mining, a global association of the 15 of the largest mining and metal companies and 24 national mining and global commodities associations released its, Annual Review 2006: Setting the Standards to Meet the Challenge of Sustainable Development.
In addressing CSR, the report identifies key challenges for the metals and mining industry including promoting sustainable development and avoiding the “resource curse” (ensuring that mining benefits all citizens of the communities in which it takes place).
The sustainability section of the report is divided according to several considerations specific to the mining and metals sector. Under each, the report describes work that the ICMM has taken over the past year to promote these values. Highlights include:
Sustainable development – According to the Annual Review, independent third party assurance of sustainable development performance was introduced for all 15 ICMM member companies. The third party assurance supplements ICMM’s 10-principle Sustainable Development Framework which was developed in 2002 in collaboration with the Global Reporting Initiative (GRI) and led to the GRI’s Mining and Metals Sector Supplement.
Health and safety – Admitting that mining constitutes “some of the world’s most challenging occupational environments” the report states that ICMM hosted a conference on safety and health for 300 senior industry executives in Johannesburg in 2006 which focused on “best practice” sharing
Socio-economic development – The report notes that ICMM has increased its engagement with John Ruggie, the UN Secretary-General’s Special Representative on business and human rights.
In March, says the report, the ICMM released a draft position statement on ‘Indigenous Peoples Issues’ and has consulted with almost 50 Indigenous Peoples organizations, NGOs, governments and intergovernmental agencies, which will inform its second revision on the statement.
In 2005 the ICMM and the World Bank produced a Community Development Toolkit, which consists of 17 tools designed to help companies, local governments, communities and community-based organizations work more effectively. This year the toolkit was published in Mandarin and Spanish.
‘Avoiding the Resource Curse’
According to the report, “A common criticism of large-scale minerals exploitation is that it unbalances and distorts the economies of countries and leads to lower rates of economic growth than comparable countries without natural resources.”
In 2004, says the report, the ICMM launched a Resource Endowment Initiative to address this criticism and to better understand how large-scale mining activity in low- and middle-income countries can positively impact socio-economic development. The project was undertaken in partnership with UNCTAD and the World Bank and with an international advisory group created to ensure objectivity. The Resource Endowment Initiative findings were launched at the World Economic Forum in Davos, and later in the year World Bank President Paul Wolfowitz indicated his support for further joint action on the initiative.
For the full report click here.
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Starbucks’ Approach to Corporate Social Responsibility:
Excerpts From Its Annual Report
As Corporate Social Responsibility's popularity rises, it is showing up not only in the increasing number of CSR reports companies are issuing, but also in more traditional communications to investors, such as annual reports. Few companies have done more to promote themselves as socially responsible than the Seattle, US-based coffee company, Starbucks. The following excerpts from its Fiscal Year 2006 CSR Annual Report outline the ways the company is integrating CSR into its employee relations, environmental, trading, and sourcing practices (according to Starbucks, its CSR report will available in March):
Starbucks’ CSR Approach
“We’ve always believed that leadership companies must set a higher standard for how business is done….
Our approach to corporate social responsibility (CSR) includes developing ethical sourcing practices for products such as coffee and cocoa, strengthening our involvement in education programs focused on cultural diversity globally, funding water projects in developing countries, and reducing our environmental footprint. To learn more, please see Starbucks Fiscal Year 2006 CSR Annual Report, available at www.starbucks.com/csr in late March 2007.….”
“…we made a commitment to treat these exceptional partners (Starbucks employees) with respect and dignity. We wrote that down—and it became the first of six Guiding Principles that would determine how we’d run our business back then, today and always.”
Living Our Values
“Thirty-five years later, we remain true to this commitment. We continue to offer comprehensive health care to all eligible full- and part-time U.S. partners. We constantly assess and update our Total Pay package to make sure it remains competitive. We provide broad-based Bean Stock options to all eligible global partners. And we strive to create a workforce in each store that reflects the overall diversity of its community.
It’s a philosophy that continues to pay dividends. In a recent global Partner View Survey, Starbucks partners weighed in with an exceptionally high rate of participation (84 percent) and lofty marks for overall satisfaction (86 percent). Our inclusion in the DiversityInc “Top 50 Companies for Diversity” and “Top 10 Companies for Latinos” acknowledges our commitment to creating a diverse, inclusive global workforce…
During fiscal 2006, we continued to demonstrate that doing good makes good business sense with a threefold approach that focuses on:
- Implementing progressive ways to reduce our environmental footprint
- Sourcing our products in an ethical manner
- Investing in the quality of life in our communities.”
“Exceptional coffee is our core business. Since the quality of the world’s annual coffee harvest is strongly influenced by climate conditions and other ecological factors, we are dedicated to reducing our environmental impact. This past year our U.S. and Canada stores introduced the first-ever hot-beverage cup containing 10 percent post-consumer recycled material, which will eliminate the use of more than 5 million pounds of virgin tree fiber. We also decreased the environmental impact of our coffeehouses by purchasing renewable energy certificates to offset 20 percent of the energy used in our U.S. and Canada company-operated stores.”
“As part of our ongoing commitment to ethical sourcing, we began implementing a cocoa-purchasing program geared toward ensuring that the cocoa used in Starbucks products is cultivated, harvested and processed in a socially, economically and environmentally responsible manner. Based on our industry-benchmark C.A.F.E. Practices model for coffee, its highlights include affordable loans for farmers, sustainable farm management practices, the prohibition of forced child labor, and economic transparency all along the value chain, from farmer to exporter.”
Starbucks C.A.F.E. Practices
“During fiscal 2006, we continued to demonstrate our unwavering commitment to helping farmers produce high-quality coffee through our Coffee and Farmer Equity (C.A.F.E.) Practices, an unprecedented program in which we have created a comprehensive set of guidelines to ensure that the coffee we purchase is grown and processed in a sustainable manner.
C.A.F.E. Practices addresses important issues relating to individual farmers, cooperatives, processors, exporters and importers—all invaluable partners in our goal of creating a long-term supply of fine coffee for our customers. By requiring safe and humane working conditions, mandatory economic transparency that shows price paid all the way back to the farmer and other verifiable measures across our supply chain, C.A.F.E. Practices provides an all-encompassing solution to help establish sustainable methods of coffee production that result in quality harvests year after year.
In fiscal year 2006, C.A.F.E. Practices once again proved its value to both Starbucks and the participating farming communities. We purchased more than 150 million pounds of coffee from independently verified C.A.F.E. Practices suppliers, an increase of more than 100 percent from the previous year, and began verifying the first farms in Africa. We also continued to work directly with farmers through our Farmer Support Center, an agronomy field office located in Costa Rica that allows us to work side by side with coffee farmers and suppliers on their sustainability measures and coffee quality.”
Fair Trade Certified Coffees
”In addition to C.A.F.E. Practices, we recognize the value that other third parity certifications, particularly Fair Trade and organic, have for some of our customers. During fiscal 2006, we continued to support the Fair Trade movement, which shares common goals with C.A.F.E. Practices but which works specifically with smallholder farmers who are organized into participating cooperatives. We reinforced our position as the largest buyer, roaster, and distributor of Fair Trade certified coffee in North America with global purchases of more than 18 million pounds. We also continued to work with FairTrade Labelling Organizations International (FLO) to distribute Fair Trade Certified™ products globally through several different channels.”
For the full report visit Starbucks' website
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CSR Reporting: Study Shows Increase in Large U.S. Companies
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An analysis by the Social Investment Research Analyst Network (SIRAN), an analyst network that supports more than 150 North American social investment research analysts from 30 investment firms, research providers, and affiliated investor groups, shows that more large U.S. Companies are reporting on social and environmental (S&E) issues with over 40 percent of S&P 100 index companies issuing annual reports on corporate social responsibility and growing numbers using “Global Reporting Initiative” standard.
SIRAN first issued it’s analysis environmental and social reporting practices of companies in the S&P 100 Index in June 2005 and updated its analysis a year later in June 2006. For the 2006 analysis, independent investment research firm KLD Research & Analytics, Inc. utilized SOCRATES, its proprietary research database, and conducted an independent review of the public websites of all S&P 100 companies to assess their disclosure of environmental, social and governance policies and performance to answer the following seven questions:
1. Company has separate CSR/Sustainability section of web-site?
2. Company has annual CSR/Sustainability Report?
3. Company references GRI in report?
4. Company has GRI content index?
5. Company report has goals and benchmarks?
6. Company is GRI Organizational Stakeholder?
7. Company report is GRI "In Accordance"?
Key Findings from the 2006 Analysis
Website Coverage of S&E Issues
More than three-quarters of the S&P 100 Index (79 companies) now have special sections of their websites dedicated to sharing information about their social and environmental policies and performance. This represents a 34% increase from last year, when 59 companies in the S&P 100 included this information on their websites.
Overall, in the last year a dozen new companies issued corporate social responsibility reports for the first time, including Cisco Systems, General Electric, Time Warner, and Wells Fargo. Other members of the S&P 100, such as American International Group and Black & Decker, have pledged to issue their first reports later this year.
Forty-three companies in the S&P Index now issue annual corporate social responsibility (CSR) reports (up from the 39 companies in the S&P 100 that issued such reports for the 2005 study). This net figure reflects both the addition of 12 companies that joined the ranks of CSR reporters in 2005, and the deletion of eight companies that have moved to web-based CSR reporting rather than issuing stand-along reports, issued CSR reports in 2004 but not in 2005, or dropped out of the S&P 100.
Over a third of the S&P 100 Index (34 companies) say they base their CSR reports on a widely recognized external standard for reporting called the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines. This was up sharply from 2005, when 25 companies in the S&P based their reports on the GRI guidelines. The uptick reflects a concerted outreach effort by SIRAN members to promote reporting based on the GRI to the S&P 100. In 2006, 27 S&P 100 companies included an index to GRI indicators in their reports, up from 23 in 2005. This year, six of the companies met the highest standard of reporting fully “in accordance” with the GRI guidelines.
According to SIRAN’s press release, institutional investors filed 19 shareholder proposals over the last year calling on companies to issue sustainability reports that detail their social and environmental performance, which received record levels of support, including 48% in favor for a proposal filed at construction equipment manufacturer Terex.
According to Steve Lippman, Vice President of Social Research at Boston-based Trillium Asset Management Corporation these proposal reflect that “a growing number of investors recognize that how companies manage environmental and social challenges can affect their business and their stock price.”
For the full analysis, including results from individual companies, visit SIRAN’s website http://www.siran.org/csr.php.
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Shell & Exxon Mobil: Who Tells The Best Social Responsibility Story?
Corporate social responsibility reporting is increasing, but can companies do this in a credibly manner? Ethicsworld compares the new “Shell Sustainability Report 2005” and the ExxonMobil “2005 Corporate Citizenship Report.”
Oil companies are facing particularly difficult publicly credibility challenges at this time of record high earnings and record high gas pump prices to consumers. Both Shell and ExxonMobil are responding in part by seeking to demonstrate that they are operating as excellent corporate citizens. While both companies post a good deal of information on their websites, the leading edge of their efforts are their annual CSR reports.
CEO Letters: Both reports are detailed. They cover a comprehensive range of issues. In their cover letters ExxonMobil Chairman and CEO Rex Tillerson and Shell Chief Executive Jeroen van der Veer highlight achievements, underscore the seriousness with which they take key social responsibility issues and conclude that their companies are performing well. They do not highlight external criticisms in this section, but both imply that they recognize that still better performance can be achieved and that this is an important challenge for the period ahead.
External Review Committee of the CSR Reports. The credibility of these reports, especially among non-governmental organizations and the media, may well relate to the efforts that the companies make to demonstrate substantive external verification of their claims. The Exxon Mobil report does not contain comment from NGOs, nor is it subject to rteview by them, although it contains an "Assurance Statement" from Lloyd's Register Quality Assurance, Inc. that explains how data in the report was externally reviewed, but does not make critical comments. ExxonMobil also points out that in its efforts to improve reporting its 2005 report reflects comments that it received on its 2004 report from Business for Social Responsibility.
By contrast, the Shell report highlights the role played by a special NGO external review committee that analyzed the presentation and the material provided by the company and engaged in discussions with the top management of Shell. The review group publishes a letter in the new Shell report that generally praises Shell’s efforts and notes a number of areas for improved future reporting. The committee’s existence, especially given its participants, is clearly a serious effort by Shell to secure external credibility and it is quite effective, although greater detail on the verification methodologies used by the experts would have been helpful. The committee consisted of Jermyn Brooks, as the chair. He is a member of the board of directors of Transparency International and plays the lead role for TI in promoting anti-bribery approaches to business. His colleagues on the committee were Margaret Jungk of the Danish Institute for Human Rights, Dr. Li Hailai of the Institute for Environment and Development, Roger Hammond of Living Earth, and Jonathan Lash of the World Resources Institute.
Employee Safety. The 2005 reports of both companies note this critical area. The Shell report does not devote as much space nor detail to this issue as the Exxon Mobil report. However, it is significant that its Chief Executive felt bound in his introductory letter to highlight a serious problem and note, “I deeply regret that three employees and 33 contractors lost their lives at work in 2005. Ten of these fatalities occurred in road accidents, despite our major programmes in this area.”
A similar statement of regret is not to be found in the Exxon Mobil CEO’s cover letter, but the reporting on this topic in the body of the company’s report is impressive. ExxonMobil underscores its Nobody Gets Hurt policy and reports that “Tragically, we had eight workforce fatalities in 2005 – three employees and five contractors.” It then goes on to provide detailed information on occupational injuries and illnesses and resulting lost work time. Moreover, it provides several country examples (France, Malaysia, Hong Kong) to highlight the pro-active approaches that it is taking in this area.
Corruption. ExxonMobil provides clear statements in support of transparency and against corruption. It notes its support for the Extractive Industries Transparency Initiative and its agreements with a growing list of governments to publicly provide greater disclosure on its royalty and other payments. In addition, its highlights the approaches it has in place to detect bribery and counter it. The Shell report, however, goes far further when it comes to detailed disclosure. It notes that in 2005 there were 107 reported violations of the company’s anti-bribery principles and as a result Shell ended relationships with 175 staff and contractors. The report says that the company runs an extensive confidential survey of all of its staff on the issue of corruption every two years and it has also introduced a global whistleblowing helpline and supporting website to encourage staff to report bribery when they see it.
Climate Change. Here again the companies take strikingly different approaches. Shell devotes a larger number of pages to its climate change section than to any other section in its report, it openly acknowledges the severity of the problem and it provides a substantial amount of data within the text on its performance in lowering GHG emissions. It clearly states and explains where it has failed to meet targets and where challenges need to be overcome (for instance the high frequency of flaring in its Nigerian operations). Shell reports that it is well on their way to meeting its target in the European Union’s Emissions Trading Scheme, which was launched after the Kyoto Protocol came into force.
The Exxon Mobil report, which is also substantive on this issue, involves a rather polemical approach. It contains an essay that raises questions about direct links between GHG emissions and climate change (indeed, in this essay it refrains from using the term “climate change,” but instead opts for “climate science”). It notes that it has supported substantial scientific research and it then argues that, “climate science is complex…As a result, the extent to which recent temperature changes can be attributed to greenhouse gas increases remain uncertain.” In a box in its report it then states its opposition to the Kyoto Protocol, which it asserts, “is [not] the right approach to reducing greenhouse gases. We are concerned it will impose significant economic costs in the developed world while doing little to achieve its goal of climate change.”
Moreover, while Shell states that it follows the Global Reporting Initiative’s (GRI) reporting guidelines, Exxon Mobil notes, “while we recognize the value of the initiative we focused on an approach we believe is more relevant to the issues and indicators particular to our industry.” To be sure, Exxon Mobil then details its actual environmental approaches and, perhaps reluctantly, admits that, “Recognizing the risk of climate change, we are taking actions to improve efficiency and reduce greenhouse gas emissions in our operations.”
Political Involvement and Contributions. Shell notes that one of its revised 2005 General Business Principles is that, “We will make no payments to political parties or campaigns.” Exxon Mobil devotes an entire sub-section to this topic, evidently sensitive to the recent plethora of scandals involving Washington politicians, lobbyists and corporate donations. The company reports the existence of its Exxon Mobil Political Action Committee. It says that this group, as well as the company’s lobbying efforts, are fully within the law. It reports that it disbursed $281,900 in contributions to federal candidates in the first half of the 2005-2006 election cycle.
Conclusion: These are serious reports by companies that recognize that they can no longer just say “trust us,” but need to account comprehensively for their actions and their approaches. The Shell report appears to be far more directed to social responsibility activist, while the Exxon Mobil report never drifts too far from indicating that it is sensitive to the views of U.S. politicians (such as the Bush Administration’s opposition to the Kyoto Protocol) and its shareholders. For example, Shell decides not to address the issue of its record profits in this report, leaving it instead to its other communications tools. But, the Exxon Mobil report includes a detailed section entitled, “Investments, Prices, and Profits.” The release of its record fourth quarter earnings sparked a high-profile debate among lawmakers responding to public criticism that big oil companies were hugely enriching themselves as the American public suffered the burden of extremely high gas prices. Exxon Mobil says bluntly: “We believe that a fundamental aspect of corporate citizenship is using the company’s earnings to responsibly meet the world’s growing energy needs while delivering value to our shareholders and competitive prices to our customers.”
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MERCK Publishes Its First Corporate Responsibility Report
Merck, stressing integrity, ethics and transparency, has published its first annual corporate responsibility report and a newly updated CSR section on its website. The new report under the slogan of “Committed to Making a Difference,” Provides the company with the opportunity to articulate its core values, to explain its approaches to corporate governance, to highlight its philanthropic endeavors around the world and to provide insights into its approaches to the environment, health and safety.
President and CEO Richard T.Clark writes that, “This report is part of an intense commitment to conduct ourselves responsibly and transparently. In addition to holding ourselves to our own strict standards and commitments, Merck also relies on insights from others – such as the UN Millennium Development Goals (MDGs) – as we develop, execute and measure our own programs and initiatives.”
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WPP Report: How We Behave
WPP – one of the world’s largest marketing companies - sets an example by succinctly highlighting its ethical concerns in a box at the start of its 2004 Annual Report headlined “How we behave – Corporate responsibility.” Three priorities are stressed in concise fashion. 1. “The Impact of our work including marketing ethics, compliance with marketing standards, protection of consumer privacy, social and caused-related marketing…2. “Employment including diversity and equal opportunities, business ethics, employee development, remuneration, communication and health and safety. Our goal is to have a talent base that reflects the communities in which we operate. We believe diversity contributes to creativity….3. “Social investment including pro bono work, donations to charity and employee volunteering…”
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Dell Highlights Commitment
The latest Dell Annual report stresses commitments to corporate governance, global diversity, community engagement and sustainability. On the latter topic, for example, the company highlights its Fiscal 2005 Sustainability Report and noted among other issues that it has joined the Global Business Coalition on HIV/AIDS and endorsed the Calvert Women’s Principles. In December 2004, Calvert announced that Dell and Starbucks were the first corporations to endorse these Principles (See Article).
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