Corporate Social Responsibility

Surveys and Trends

On this page

• Dow Jones Reports Encouraging Corproate Approaches in Global Corruption Arena
• The Top 10 US Business Schools for Ethics and Social Responsibility
• UN Global Compact - Accenture 2010 Survey of Corporate Social Responsibility
• CERES Reports on Corporate Performance in Water Risk Areas
• McKinsey Quarterly - Applying Corporate Social Responsibility
• CSR Asia Releases Corporate CSR Ratings
• Human Rights Tops BSR/GlobeScan Business Poll 2009
• Digital Technology Increasingly Used in Social Responsibility Reporting
• AccountAbility and the Ethics of Consumerism
• Emerging Market Fund Managers & Sustainabuility - from Mercer-IFC
• The Global 100 Most Sustainable Corporations
• Global Overview of Reporting progress - Leading KPMG Survey
• Vodafone Tops Accountability Global Corporate Table 2008
• Reputation Institute - World's Best Companies
• CSR Trends in South Korea
• Ceres Says Companies Making Significant Commitments to Climate Change Goals
• Ethisphere Magazine Ranks Companies Worldwide Based on Its Set of Ethics Criteria
• Global Reporting Initiative Collects Feedback from Sustainability Report Readers
• Survey Tracks Trends in Global Corporate Human Rights Abuse Allegations
• CRO Ranks 100 Best Corporate Citizens 2008 with Newly Revised Criteria
• Surevy Tracks Sustainability Reporting in Emerging Markets
• Gap Exists Between Corporate Attitudes and Corporate Behavior
• 2007 AccountAbility Rating for Corporate Social Responsibility
• Executives Believe Environment Will Affect Business Most (New McKinsey Survey)
• Top 10 Best U.S. Corporate Citizens 2007
• Key Differences Seen in CSR Performance by Companies in Different Countries
• Hudson Report Evaluates Employee Attitudes Toward Corporate CSR Programs
• Study Highlights Long-Term Effects of Global Warming on Agriculture
  
  Read more on the next page...
  

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Dow Jones Global Corporate Survey of Business and Anti-Corruption Yields Encouraging Evidence on Corporate Approaches.

Survey Finds that More Than 55% of Companies Delay or Avoid Working with Global Business Partners; More Than 40% of Companies Have Lost Business to Competitors That Won Contracts Unethically

The press statement by Dow Jones --- More than half of the companies doing business internationally are shelving key business partnerships due to concerns about corruption liability in foreign markets, according to this year’s Dow Jones State of Anti-Corruption Survey. The bi-annual survey, which surveyed more than 300 companies worldwide, also found a marked increase in the number of companies claiming to have lost business due to competitors acting unethically – from 10% in the 2009 study to 40% today.
“Strict liability provisions in legislation like the U.K. Bribery Act make businesses responsible for the activities of their agents and partners overseas, and this is having a direct impact on the occurrence of new business partnerships between firms,” said Rupert de Ruig, managing director of Risk & Compliance, Dow Jones & Company. “However, what’s striking is that only 30% of the companies say they are monitoring partner business integrity.  Firms are spending more time investigating new executive hires than they do screening new business partners, leaving their companies open to risk in this area.”
 More than 40% of Companies Have Lost Business to Unethical Competitors
 Of those claiming to have lost business to an unethical competitor, most believe the competitor broke anti-corruption laws in doing business.
 “At face value these findings support the view that anti-bribery and corruption regulation damages business and is ineffective in stopping corporate bribery,” said Mr. de Ruig. “However, there may be a stronger argument that the findings are an indication of higher standards and controls in companies and an increasing awareness of bribery and unethical business practices in the marketplace.”
 Factors Causing Review of Business Partner Relationships
 Executives cited government sanctions and negative media coverage as the events most likely to trigger relationship reviews. Companies in Asia-Pacific, in particular, focus more than others on ownership and management changes.
 Majority Back Reporting of Suspected Bribery Among Competitors
 More than half of respondents (56%) believe businesses should always report suspected bribery by a competitor to the appropriate authorities; and among Asia Pacific respondents this percentage rose to nearly 70%. Only 8% felt companies should never file reports.
 Nearly 70% of respondents in the Asia-Pacific region believe bribery should always be reported. “Bribery is seen by some organizations as an accepted way of doing business in certain parts of the Asia-Pacific region, “said Mr. De Ruig. “However, contrary to perceptions, the responses indicate that local companies claim to have very little tolerance towards unethical behavior.”
 Resource Constraints Have Led to the Centralization of the Compliance Function
 According to the survey, nearly half the companies lack confidence in their due diligence processes. The same number attribute this to difficulty in assessing the credibility of information or having insufficient resources. Compared to the 2009 survey, companies have shifted compliance responsibility away from regional teams, to more centrally controlled groups.
 “Any tendency to centralize due diligence responsibilities produces efficiencies and makes it easier to implement global standards. However, it may leave companies open to risk, as they lack the local cultural knowledge and language skills of staff on the ground,” said Mr. de Ruig. “The survey reveals that these concerns are felt particularly keenly in Western Europe where almost one third of executives point to lack of time, and almost one in five to lack of linguistic expertise, as impediments to effective due diligence.” 
 Anti-Corruption Programs Have a Sell-by Date
 Almost three quarters of respondents have anti-corruption programs in place, with consistent rates of implementation across all regions and industries. Nearly 45% of these programs have been in place for six years or more. In contrast, only 8% of respondents have implemented an anti-corruption program in the past 12 months.
 “We recommend that companies with long-established anti-corruption programs conduct regular reviews to ensure their relevance in the fast evolving landscape of anti-corruption regulation,” added Mr. de Ruig. “A program that was adequate six years ago may not offer the same level of protection.”
Posted 05/27/2011

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TOP US BUSINESS SCHOOLS FOR ETHICS

MBA in Corporate Social Responsibility (CSR) and Business Ethics

The notions of Corporate Social Responsibility (CSR), Sustainability and Business Ethics have changed drastically over the past decade; and consequently the ways in which top business schools address and adapt the topics into their MBA programs have also changed, according to QS TOPMBA

Coming to light at the turn of the millennium with the misgivings leading to the ENRON corporate scandal of 2001, the field has more recently been influenced by the perception that wholesale attitudes towards business may have affected and in fact accentuated the global banking crisis. The demise of multinational corporations such as Lehman Brothers has ensured that Business Schools and the MBA qualification itself have not been shielded from questions asked of the financial services industry, with many business leaders and executives of firms coming under criticism in fact graduates of the world’s top MBA programs. Read on >

* Class and Salary data is based on latest available information provided by schools, and has no effect on rank.

Top Business Schools for MBA in CSR and Business Ethics

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UN Global Compact/Accenture –“the largest such study of CEOs ever conducted on the topic of sustainability.”

 A New Era of Sustainability

Excerpts from the survey report that waqs undertaken by Accenture for and with the United Nations Global Compact:

93 percent of CEOs see sustainability as important to their company’s future success. This is one of the most significant headlines of our survey of 766 United Nations Global Compact (UNGC) member CEOs, extensive interviews with an additional 50 member CEOs and further interviews with more than 50 business and civil society leaders.

Demonstrating a visible and authentic commitment to sustainability is especially important to CEOs because it is
part of an urgent need to regain and build trust from the public and other key stakeholders, such as consumers and
governments—trust that was shaken by the recent global financial crisis. Strengthening brand, trust and reputation is
the strongest motivator for taking action on sustainability issues, identified by 72 percent of CEOs. However, CEOs
often assume that their own company is more respected and trusted than their industry in general—leading to a real
concern that executives may underestimate the extent to which mistrust in business continues to be an issue in the
public mind.CEOs believe that execution is now the real challenge to bringing about the new era of sustainability.

Confidence among business leaders about their progress toward this new era is strong, and their companies are taking concrete steps toward embedded sustainability. Eighty-one percent of CEOs—compared to just 50 percent in 2007 — stated that sustainability issues are now fully embedded into the strategy and operations of their company. For example, we saw cases of companies beginning to integrate sustainability issues into their executive compensation packages, as well as design and innovation functions, more than in 2007.

However, our conversations suggest that while sustainability has clearly become part and parcel of how many businesses operate, it has yet to permeate all elements of core business—that is, into capabilities, processes and systems. In particular, the difficulty of implementation, especially across supply chains and subsidiaries, is seen by CEOs as the top barrier to the full integration of sustainability. Our research finds a significant performance gap between those CEOs who agree that sustainability should be embedded throughout their subsidiaries (91 percent) and supply
chain (88 percent), and those who report their company is already doing so (59 percent and 54 percent, respectively).
Furthermore, full integration of sustainability into performance management frameworks and approaches to training and development remains some way off.

Many CEOs believe that the investment community is not supporting corporate efforts to create value through sustainable products and services by failing to factor performance on sustainability issues into valuation models.

Regulatory uncertainty: Across the board, CEOs spoke of the need for greater clarity around the shape and scope of future regulation in response to regulatory challenges.

CEO opinion: by the numbers:

93% of CEOs believe that sustainability issues will be critical to the future success of their business.

72% of CEOs cite “brand, trust and reputation” as one of the top three factors driving them to take action on sustainability issues. Revenue growth and cost reduction is second with 44%.

72% of CEOs see education as the global development issue most critical to address for the future success of their business. Climate change is second with 66%.

58% of CEOs identify consumers as the most important stakeholder group that will impact the way they manage societal expectations. Employees were second with 45%.

91% of CEOs report that their company will employ new technologies (e.g., renewable energy, energy efficiency, information and communication technologies) to address sustainability issues over the next five years.

96% of CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company (up from 72% in 2007).

49% of CEOs cite complexity of implementation across functions as the most significant barrier to implementing an integrated, company-wide approach to sustainability. Competing strategic priorities is second with 48%.

88% of CEOs believe that they should be integrating sustainability through their supply chain. Only 54% believe that this has been achieved within their company. An almost identical performance gap is seen for subsidiaries.

86% of CEOs see “accurate valuation by investors of sustainability in longterm investments” as important to reaching a tipping point in sustainability.

64% of CEOs see the most important role of the UN Global Compact as sharing examples of best and emerging practices on sustainability. Guidance on implementation is second with 51%.

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“MURKY WATERS” – CERES report finds key faults at major global corporations – they fall short in managing, disclosing Water Scarcity Risks

UK Beverage Firm, Swiss Mining Co., Arizona Utility post highest scores among 100 companies in benchmarking study

Despite growing water-scarcity risks in many parts of the world, the vast majority of leading companies in water-intensive industries have weak management and disclosure of water-related risks and opportunities, according to a first-ever report issued by the Ceres investor coalition, the financial services firm UBS and financial data provider Bloomberg.

The report evaluates and ranks water disclosure practices of 100 publicly traded companies in eight key sectors exposed to water-related risks. The report shows that many companies are not including material water risks and performance data in their financial filings, nor are they providing local-level water data, particularly in the context of facilities in water-stressed regions. Moreover, none of the 100 companies are providing comprehensive water data on their supply chains, an especially glaring omission given that the vast majority of many corporations' water footprint is in the supply chain. The shortcomings are evident in the report's final scores.

Using a scoring scale of 0 to 100, the three highest scoring companies were UK beverage company Diageo, Swiss mining company Xstrata and U.S. electric power company Pinnacle West (owner of Arizona Public Services) with 43 points, 42 points and 38 points, respectively. Eighty of the 100 companies scored fewer than 30 points. "Most companies provide basic disclosure on overall water use and water scarcity concerns, but their focus and attention so far is not nearly at the level needed given the enormity of this growing global challenge," said Mindy S. Lubber, president of Ceres, which published the report, Murky Waters: Corporate Reporting on Water Risk.

"Our global economy runs on water and in many parts of the world this finite resource is under threat. Companies must do more to disclose their potential exposure from this issue and their strategies for responding." "Water is integral to the global economy. Whether you're in California or China, clean potable water is an absolute must for sustaining communities and sustaining economic growth," said Jack Ehnes, chief executive officer of the California State Teachers Retirement System (CalSTRS), the nation's second largest public pension fund with $134 billion in assets under management.

The report assesses companies in eight key sectors: beverage, chemicals, electric power, food, homebuilding, mining, oil and gas and semiconductors. The report scored the companies based on five key categories of disclosure: water accounting, risk assessment, direct operations, supply chain and stakeholder engagement. Within each category, sub-elements were divided to produce a final scored assessment based on the depth and clarity of corporate disclosures. An extra "opportunities" category was created for two of the eight industry groups – chemical firms and homebuilders – which resulted in those sectors being scored on a 0- to 112-point scale. Among the key overall findings:

• The mining sector scored highest overall, followed by the beverage industry. Companies in the homebuilding sector had the lowest overall scores.

• Only 21 companies disclose targets to reduce water use, and even fewer – just 15 companies – had goals to reduce wastewater discharge.

• Only 17 companies report local-level water data and only a handful provide the information in the context of operations in water stressed regions.

Sector Highest & Lowest Scoreres:

Among the key company scores:Beverage: Diageo (43 points) Dr. Pepper Snapple (8 points)
Electric Power: Pinnacle West/APS (38) Florida Power & Light (8)
Food: Unilever (34) Archer Daniels Midland & Bunge (9)
Mining: Xstrata (42) Peabody Energy (8) Oil & Gas: BP (35) Encana (4)
Semiconductors: Toshiba (35) Micron (1)
Chemicals: Mitsui (33) Saudi Basic (5)
Homebuilding: KB Home (15) D.R. Horton, Hovnanian, Ryland, NVR (4)

The report comes as rising populations, rapid economic growth in developing countries, climate change and growing regulation are triggering growing water availability concerns in the U.S and abroad. The report cites numerous examples where impacts are already being felt by vulnerable industry sectors, including:

• In 2009, water shortages in California devastated the state's agricultural industry, leading to an estimated loss of 21,000 jobs and more than $1 billion in revenues.
• During the 2007-08 drought in Georgia, a severe reduction in hydropower generation due to low water levels forced electric power firm Southern Co. to buy $33 million in fossil fuel-based energy.
• Mining company Newmont faced protests by thousands of local residents near its gold mine in Peru due to water concerns that led the company to relinquish access to 3.9 million ounces of gold reserves in 2004.

The report comes at a time of increasing pressure from investors for improved corporate disclosure of environmental, social and governance (ESG) risks that they face. On Jan. 27, in response to investor requests, the U.S. Securities and Exchange Commission issued formal "interpretive guidance" clarifying the type of information that companies should be disclosing regarding material climate change risks and opportunities, including those relating to water-availability risk. The report builds on the SEC’s guidance with specific recommendations for companies to improve their water-related disclosure. It recommends that companies:

• include material water risk factors and performance data in their financial filings;
• provide water performance data broken down to the facility level for operations in water-stressed regions;
• outline actions and policies for assessing and managing water risks, including quantified targets for reducing wastewater and water use;
• disclose how they are collaborating with stakeholders and suppliers on water risks, including setting performance goals for key supply chains;
• outline specific strategies for developing water-related products with strong market potential in a water-constrained world. The report also recommends that investors:
• engage the companies they own in water-intensive sectors about how they are assessing and disclosing water risks and related performance information;
• ask their asset managers to assess and engage companies on water and other ESG risks and opportunities– and make this a stipulation in Requests for Proposals (RFPs) and annual performance reviews;
• support investor initiatives, such as the Carbon Disclosure Project, the United Nations’ Principles for Responsible Investment’s work with the CEO Water Mandate, to achieve increased water disclosure.

Posted 02/14/2010

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From the McKinsey Quarterly

APPLYING CORPORATE SOCIAL RESPONSIBILITY
For companies that see CSR as an opportunity to strengthen the business, the big challenge is execution. Smart partnering can provide a practical way forward by Tracey Keys, Thomas W. Malnight, and Kees van der Graaf

Too often, executives have viewed corporate social responsibility (CSR) as just another source of pressure or passing fad. But as customers, employees, and suppliers—and, indeed, society more broadly—place increasing importance on CSR, some leaders have started to look at it as a creative opportunity to fundamentally strengthen their businesses while contributing to society at the same time. They view CSR as central to their overall strategies, helping them to creatively address key business issues.

The big challenge for executives is how to develop an approach that can truly deliver on these lofty ambitions—and, as of yet, few have found the way. However, some innovative companies have managed to overcome this hurdle, with smart partnering emerging as one way to create value for both the business and society simultaneously. Smart partnering focuses on key areas of impact between business and society and develops creative solutions that draw on the complementary capabilities of both to address major challenges that affect each partner. In this article, we build on lessons from smart partnering to provide a practical way forward for leaders to assess the true opportunities of CSR.

To read the full article please visit the McKinsey Quarterly
posted 07/01/2010

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CSR ASIA RELEASES ASIAN SUSTAINABILITY RATING BASED ON 51 INDICATORS OF PUBLICLY AVAILABLE INFORMATION

A full list of all the 200 companies covered in the ASR™ and their score can be found

at CSR Asia

The ASR™ was created by analysing the CSR disclosure of the top twenty largest companies in each market against 51 indicators. It is important to note that CSR disclosure is only the information that is publicly available - the information the company releases about its sustainability practices. In the process of putting together this research we acknowledge that a company may internally be addressing each of the indicator areas, but if the information is not publicly available then a score cannot be given. Sustainable business practices are transparent business practices and the ASR™ can only include information that is publicly available.

The 51 indicators have been carefully selected to cover the basic elements of sustainability that each company should be addressing through disclosure, irrespective of sector. Some issues may be more material for certain sectors than others and no weighting is currently applied to the indicators. No company is excluded from the ASR™.  The 51 indicators used to score each of the companies under six indicator section headings. The indicators are consistent with globally accepted CSR standards and expectations.

1. Governance, Codes, and Policies

The indicators in this section assess the availability and communication of company policies and codes of conduct in relation to key CSR factors including corporate governance, risk management, anti-corruption, labour and human rights issues.    

2. CSR Strategy and Communication

The indicators in this section assess company strategy on CSR and how activities are communicated to stakeholders through reporting initiatives such as the use of internationally recognised reporting guidelines, stakeholder engagement programmes, CSR training and awareness and alignment with voluntary CSR standards in company operations.    

3.  Marketplace and Supply Chain

The indicators in this section assess the supply, delivery and distribution of products and services and customer focussed activities. This includes the areas of health and safety management, supply chain standards and supplier engagement.    

4.  Workplace and People 

The indicators in this section assess how a company treats its employees and other community stakeholders and how their actions are communicated both internally and externally, this includes health policies and human resource issues, training and lifelong learning, diversity and freedom of association.    

5.  Environment

The indicators in this section assess the level of environmental data and targets set by the company and how they are reported to stakeholders. Indicators include environmental management systems, emissions data, the use of renewable energy and customer and employee focused environmental initiatives.    

6.  Community and Development  

Community investment initiatives are perhaps the most well known aspects of CSR in an Asia specific context with its rich history of philanthropy. However, the emerging model for issues in this section are how community initiatives are reported on and if there is evidence of data collection and monitoring of impacts and longer term goals. The indicators in this section assess evidence of long term strategies and targets, monitoring systems and quantifiable impacts of the investment and related employee volunteering.

Scoring is a points system with points given for each of the criteria: 2 points awarded for comprehensive disclosure, 1 point for partial disclosure and 0 points for non-disclosure.

Posted 11/11/2009

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Climate Change, Human Rights Top Sustainability Priorities for Year Ahead

Climate change and human rights are the most significant priorities for business' sustainability efforts in the year ahead, according to the “BSR/GlobeScan State of Sustainable Business Poll 2009.”  The poll involved 274 business leaders from 15 countries attending  BSR’s recent annual conference.

The poll findings include:

Climate change and human rights are the most significant priorities for business’ sustainability efforts in the year ahead. Respondents see more significant opportunities than barriers in addressing climate change, especially in terms of cost savings and efficiencies, suggesting increasing activity among companies in this key area. Human rights and workers’ rights are both high priorities for companies in the year ahead, indicating growing awareness among business leaders of the need to broaden companies’ responsibilities in this area.

Those surveyed are increasingly optimistic that sustainability will be a core part of business strategy in the years ahead. Majorities expect increased activity in key areas—especially in internal and external communications—suggesting wider recognition of the need to expand the role of CSR/sustainability throughout their organizations. Optimism about the growing strategic importance of CSR/sustainability may suggest a broader acknowledgement of the potential role of business to contribute to progress on pressing global challenges.

Rebuilding trust in business requires innovation and positive impacts. Companies should take two key actions to rebuild the public’s trust in business that dropped as a result of the economic crisis: demonstrate positive social and environmental impacts, and innovate for sustainability. The consumer products industry is by far seen as having acted most responsibly in recent years, reflecting efforts by companies such as Wal-Mart to demonstrate real results in advancing the sustainability agenda.

Most companies either measure the ROI of sustainability efforts or plan to do so soon. The ROI of sustainability initiatives is currently measured mostly through reputational benefits and employee morale and satisfaction, indicating broad recognition of the benefits of sustainability beyond the bottom line.

Posted 11/11/2009

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Increasing Numbers of Companies Are Using Technology to Report Social Responsibility Progress

New research by GRI and Radley Yeldar

Research suggests that digital technology is changing the way companies report on sustainability.  The research also reveals that sustainability performance data is generally found within two clicks from companies’ home pages, highlighting the importance that is now placed on sharing this information with external stakeholders. 

The research, a joint partnership between the Global Reporting Initiative (GRI)  and UK-based communications consultancy Radley Yeldar, looked at 40 organizations from around the world who report using the GRI G3 Guidelines. The findings identify a number of factors that can determine the effectiveness of online reporting, including the format, and how new digital technologies are used to enhance the user-experience.

Radley, Yeldar noted: “We endeavored to find out how the reporting landscape has been changed by digital communication technology. We also wanted to research how the changing practice of sustainability reporting might influence changes for a reporting standard in terms of ensuring consistency, credibility and comprehensiveness.”

When the first GRI Guidelines were released in 2000, most sustainability reports were a single, printed document. Today, for a variety of reasons, it is more accurate to talk about sustainability “reporting” – that is to say, providing public information across a range of channels.

By reducing the cost of communication, digital technology can contribute to this splintering of information. We do not have historical data to compare against our findings, but we expect that as sustainability reporting is increasingly published online, this trend away from the “report” and towards reporting across a number of channels will increase.

To the extent that this splintering makes it harder for users to access information, or to assess whether they have even seen all the relevant information, digital technology could actually reduce the effectiveness of sustainability reporting. A very simple solution to this – made possible by online reporting – is to use a fully hyperlinked GRI Content Index to help users find and access the information they care about.
While the priority given to sustainability reporting is increasing, the research also points out some pitfalls of using digital technology – including making information harder to find.  Over 20% of the companies in our sample require stakeholders to look at three or more locations to get the full GRI information.  One company in the sample spread this information over five locations. 

 Interestingly, while all the companies used PDFs to support the online communication of GRI data, the research confirms the trend towards more creative use of online channels when publishing information on corporate sustainability performance. This could present a dilemma for companies:  how can they provide information in new and innovative ways reaching new audiences through new channels while maintaining the integrity, comparability and usefulness of data that is increasingly sought by key stakeholders such as investors?

The research also found that:

-    60% of companies distribute their GRI information across two or more sources.
-    Around a third of our sample used an HTML format for their main sustainability report - although all companies continue to support this with a PDF version.
-    10% of companies used new technologies to enable users to produce a customized version of their report.
-     Nearly half our sample made regional or summary reporting available online as well as their main report.

Ernst Ligteringen, CEO of the GRI, said “Corporate disclosure on economic, environmental and social performance is fast becoming a mainstream activity, as evidenced by the fact that the majority of large companies globally now issue sustainability reports. But it’s not just the number of companies disclosing such information that’s on the rise.  It’s also the means through which this information is disclosed.  This new research suggests that many companies are no longer just issuing a single paper ‘report’ but communicating their sustainability performance across a multitude of communications channels.”

Tom Rotherham, Head of Corporate Responsibility at Radley Yeldar, a UK-based communications company, said: “Experimentation is the only way to discover what new technologies can do, so it is good to see a variety of different approaches to online reporting.  But companies should also learn from the experience of others.”

Posted 06/03/2009

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Understanding Consumer Ethics – Consumers want companies to be ‘fair to me and fair to others.’  New Survey and Recommendations from AccountAbility and the National Consumer Council (NCC) UK.

What Assures Consumers?
By Maya Forstater and Jeannette Oelschaegel with Maria Sillanpää

 “Assurance is not about a particular technical methodology or process but about achieving the outcome whereby consumers gain confidence in the information they base their decisions on, and the confidence that these decisions will not backfire on them,” states the report.

Mainstreaming ethical consumerism ---  Linking responsibility, quality, service and value for money. Increasingly consumers want companies to be ‘fair to me and fair to others’. Companies they trust show how responsibility is not an add-on but part and parcel of the way they deliver better products and service to customers.

In producing this report, AccountAbility and the National Consumer Council (NCC) have sought to make sense of what, at times, can appear to be a bewildering array of conflicting market signals: overall, UK sales of ethical products and services are still less than 5% but 40% of households and 25,000 new consumers per week are buying fairtrade. So, are we on the cusp of something significant or not? The analysis and data provided indicates that consumers are indeed actively discriminating between brands based on matters of trust. At the same time we need to accept the reality that there will always be a gap between people’s predisposition and intent to consume ‘ethically’ and reported sales of ethical goods and services. After all, we may all believe in democracy but we don’t all vote. The conclusion seems to be that in the imperfect markets in which we operate consumers, businesses and other players are innovating and helping ethical markets grow, but it remains that smart, targeted government intervention is required to reach mass market, as the examples of lead free petrol and energy efficiency labeling schemes have shown.
Barry Clavin, Ethical Policies Manager, The Co-operative Group

The report says there remains a major gap between consumers’ concern and everyday action – even where basic information to guide choices is readily available. For example, nearly 90% of people in the UK say they oppose caged egg production, but only 50% of eggs sold by major supermarkets are free range; more than 80 % of shoppers want to reduce food miles, but only a quarter look at country of origin labels; and over a quarter of people say they would pay a little more for a green electricity tariff, but only a very small minority have actually made the switch.

The report, which provides in-depth insights on how to approach a series of crucial issues for implementing Corporate Responsibility (CR) credibly in the eyes of consumers, has as its starting point the assertion that - “Businesses are now recognizing that social and environmental concerns are becoming mainstream and that is a license for businesses who share those same concerns to engage with their customers and find new ways to turn this into business value.”

The report’s executive summary notes that in order for any approach to aligning mainstream brands with consumers’ values to succeed in impacting on consumer choices it must not just concentrate on the positive drivers of consumer behavior, but also on what holds people back. Human beings are not actually all that good at things like judging accuracy, thinking about long-term risk and maximizing their own utility. What they are very good at is sniffing out hypocrisy, bad motives and lies. These are the skills that consumers use to guide their choices in the marketplace, and it is this skepticism that effective consumer assurance has to address. The report says there is a real risk that the progress towards more sustainable businesses and markets will be undermined in the longer term if consumers are not engaged.

Ed Mayo, Chief Executive, National Consumer Council, writes in a foreword to the report the findings in this new report “are by no means comfortable for practitioners in the CR field. If to come of age also requires casting off some of what went before, four key changes stand out:

1. First, it is clear that consumers understand responsibility in a far more joined up way than companies, who tend to separate out issues of customer service from issues of CR. One way of seeing this is that consumers want companies to be ‘fair to them’ as well as ‘fair to others’. If you fail on one, increasingly you will fail on the other. If your service fails to have a human touch, you have no chance of persuading consumers that you have a concern for human rights – and over time the reverse will hold true.

2. Second, the existing technical toolkit that dominates the field of professional CR, of triple bottom lines, reporting, awards and standards, is not the toolkit that allows businesses to connect with consumers on issues of fairness. The tools that work are those that have always worked on a more narrow front - including brand strategy, marketing, communication and new models of ‘open innovation’ that treat consumers as partners in product development.

3. Third, while it is true that acting responsibly often implies acting with restraint, if businesses are to take ownership of responsibility, then they will look at the solutions, such as to climate change, as an opportunity for business.

4. Fourth, there is a need not to let the often arcane and obscure language of CR get in the way. The language of consumers themselves, who will talk about issues of fairness and honesty if given a chance, without recourse to jargon, is good enough.

Posted 04/27/2009

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Sustainability Issues Now Seen As Rising In Importance For Fund Managers in Emerging Markets  - Mercer and IFC Release Survey

Mercer, the consulting group, and the Ingternational Finance Corporation (IFC) - the private sector affiliate of the World Bank Group- - have released a valuable survey of approaches by fund managers in emerging markets to sustainability issues.

Gaining ground - Integrating environmental, social and governance (ESG) factors into investment processes in emerging markets

Mercer and IFC say fund managers in emerging markets are increasingly considering environmental, social, and corporate governance (ESG) factors in their investment decisions. The research suggests sustainable investment assets under management in emerging markets have grown to over $300 billion—or nearly 10 percent of total investment in emerging markets in 2008.  Slightly more than $50 billion of assets identified represent funds labelled as sustainable investment, with the remainder reflecting mainstream institutional funds committed to integrating ESG within core investment processes.

The IFC-Mercer report also produced the first rating on ESG practices of fund managers in China, India, South Korea, and Brazil, identifying best-practice examples to pre-empt ESG risks and enhance returns.  The project included a survey of 514 equity managers from around the globe, of which 177 managers invest in emerging markets. It also included 40 face-to-face interviews with investment teams in China, India, South Korea, and Brazil, and an additional 10 interviews with managers globally who have sustainable investment strategies in emerging markets. Nearly half (46 percent) of global managers with investments in emerging markets state they are likely to integrate ESG into their investment processes, compared with 34 percent of all managers.

 "The research found pockets of innovation, with many local fund managers in emerging markets having deeper knowledge and understanding of social issues than their global counterparts,” said Danyelle Guyatt, Head of Research at Mercer’s Responsible Investment unit.  “However, there is also potential for improvement in practices, particularly in the utilization of active ownership tools such as voting and engagement,” she said.

Greg Radford, IFC’s Director of Environment & Social Development, said: “At IFC we believe that mobilizing sustainable capital flows into emerging markets will shore up those economies and ultimately relieve the burden of poverty. That’s why we’ve supported sustainable investment initiatives in the financial industry since 2002. Good progress has been made, but there’s more to be done. During this financial crisis, investors may be tempted to think of environment, social and governance issues as tomorrow’s problem. Failure to act will not only undermine the progress to-date on ESG investment-decision integration, but will profoundly impact financial markets overall.”

The survey was sponsored by IFC, in partnership with the Netherlands, Norway, Luxembourg, Italy and New Zealand.

Posted 04/01/2009

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Global 100 Most Sustainable Corporations in the World

The Global 100 Most Sustainable Corporations in the World is a project initiated by Corporate Knights Inc., with Innovest Strategic Value Advisors Inc. a leading research firm specializing in analyzing “non traditional” drivers of risk and shareholder value including companies’ performance on social, environmental and strategic governance issues. Innovest was selected as the exclusive research analytic data provider for the Global 100. Launched in 2005, the annual Global 100 is announced each year at the World Economic Forum in Davos.

See the full list of the top 100

The Global 100 includes companies from 15 countries encompassing all sectors of the economy that were evaluated according to how effectively they manage environmental, social and governance risks and opportunities, relative to their industry peers.

The United States led the way with 20 Global 100 companies (four more than they had in 2008). The United Kingdom followed with 19 (down from 24 in 2008) and Japan improved by two on its 2008 tally with a total of 15 companies qualifying in 2009.

Rounding out the top five countries with the most constituents were France (eight) and Germany (seven), while Canada, Finland, and Sweden each registered five Global 100 constituents. Two-thirds (65/100) of the 2008 companies remained on the list in 2009.

BACKGROUND:

Corporate Knights Inc. is an independent Canadian-based media company that publishes the world’s largest circulation magazine with an explicit focus on responsible business. The mission of Corporate Knights Inc. is to humanize the marketplace.

Innovest Strategic Value Advisors is an international investment advisory firm specializing in analyzing “non-traditional” drivers of risk and shareholder value including companies’ performance on environmental, social and strategic governance issues.

Posted 02/04/2009

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KPMG International Survey of Corporate Responsibility Reporting 2008

In a world of ever changing challenges companies are shifting away from risk management approaches and toward an approach that has learning and innovation at its heart. Reporting is necessity if companies are to know and understand their social and environmental impacts, and how to minimize the dangers and maximize the opportunities associated with new and emerging challenges.

KPMG states that the purpose of this survey was to track reporting trends in the world’s largest companies. The sample of over 2200 companies includes the Global Fortune 250 (G250) and the 100 largest companies by revenue (N100) in 22 countries. The survey presents historical data where possible, drawing from five previous surveys conducted by KPMG firms since 1993. Only information available in the public domain was used for this survey, such as company websites, corporate responsibility reports, and annual reports issued in 2007-2008.

Looking Ahead: The context in which companies operate evolves constantly as lessons are learned, new information becomes available, and dialogues about expectations mature. In the three years since KPMG’s last survey release, much has happened to shape the landscape of corporate responsibility and reporting. Some of these issues and developments are discussed below.

Principal global frameworks
The dominant codes and standards guiding corporate responsibility practices are designed to improve continuously over time in order to capture lessons learned and new information, as well as reflect current views on the roles and expectations of companies. Developments in the past three years have affected the state of corporate responsibility reporting today.

Most significantly for reporting, the Global Reporting Initiative (GRI) released the third iteration of its Sustainability Reporting Guidelines (G3 Guidelines) in late 2006, after a two-year development process involving some 3000 stakeholders worldwide. By 2008 the majority of companies that had reported using the earlier version of GRI Guidelines, G2, had made the switch to the G3 version. With greater emphasis on the reporting process and further elaboration of methods for calculating indicators, this new version could help encourage greater comparability, materiality, and rigor with reporting.

The International Organization for Standardization (ISO) is developing the ISO 26000 Guidance Standard on Social Responsibility. Even though this is not going to be a certification standard, it is anticipated that it will impact corporate practice when it is released partly due to the dominant position ISO has already established via the widespread use of its 14001 environmental management standard.

The importance of transparency and accountability was magnified in 2008 when the United Nations Global Compact (UNGC) - whose framework guides corporate commitment to social and environmental issues in the form of 10 principles - marked nearly 1000 companies as inactive or delisted from their active pool of participants for not communicating on progress with the Compact.

Human rights have emerged as a fast-changing issue for businesses to watch. The UN “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights” has been the subject of ongoing dialogue between business, governments, and civil society on the expectations of big business vis-à-vis human rights.

Assurance standards have also continued to evolve as a reflection of the changing landscape. In some countries the IAASB standard, ISAE3000, has been further iterated as a specific assurance standard for corporate responsibility reporting, while AccountAbility’s AA1000AS is currently undergoing a major revision process and will be reissued in late 2008. The importance of reliable data on carbon emissions has also been recognized by the IAASB, which recently set up a working group to look at developing a specialized accounting standard. Issue-specific frameworks have been developed to fill gaps on emerging issues. Some key examples include the Equator Principles, Principles for Responsible Investment (PRI), and the Environment, Social, and Governance (ESG) framework issued by Goldman Sachs, all for use in the financial services sector. For climate change, the Carbon Principles help guide emerging carbon markets, while participation in the Carbon Disclosure Project has increased substantially, as has uptake of the Greenhouse Gas Protocol (GHG Protocol).

Topics in Corporate Responsibility Reporting
KPMG Insight
In theory the link between corporate governance and corporate responsibility seems clear, but in practice many companies do not appear to be making the connection and capitalizing on the potential benefits. Reporting on supply chain risk and reporting by suppliers both look set to increase as investors, and customers in particular, demand greater responsibility and transparency. Whereas carbon footprint reporting is not as common as might be expected, there are other indications that companies are taking the risks and opportunities associated with climate change seriously.

Corporate governance
Although 92 percent of G250 companies disclose a corporate governance code of conduct or ethics, only 59 percent report on incidents of non-compliance with the code.

Supply chain
Nearly all G250 companies have a supply chain code of conduct, but only half disclose the details of how it is implemented and monitored.

Climate change
While 62 percent of G250 companies disclose information about climate risks, 69 percent of N100 companies do not. Whereas understanding the risks starts with understanding the footprint, a large part of the G250 (41 percent) need to develop this. Carbon footprint reporting is focused largely on the own operations.

Assurance and Corporate Responsibility Reporting
KPMG Insight
As stakeholders become more specific about the information they need and corporate responsibility management systems mature, combining comments from parties such as stakeholder panels with a systematic assurance process could provide the desired level of assurance about both report content and quality. With the N100 group at par with the G250 in terms of using formal assurance (40 percent), this may indicate that new reporting companies will adopt this practice as standard procedure over the next three years.

Formal assurance
Formal third party assurance of G250 reports jumped from 30 percent to 40 percent in the past three years, and the trend is similar at the national level with 39 percent of N100 reports containing formal assurance.

Third party commentary
Twenty seven percent of reports included other types of third party commentary, such as stakeholder panels or subject matter expert statements.

Providers
Major accountancy organizations are the leading providers of assurance in corporate responsibility reporting.

Standards and quality
The consistency and quality of assurance approaches is demonstrated by an increase in the use of standards. G250 companies are less likely to ask for reasonable (positive) assurance than N100 companies.

Posted 12/1/2008

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Vodafone is the most accountable of the world’s 100 largest corporations (the G-100), according to the 2008 Accountability Rating, published today.

Many of the best performing firms are members of the World Council for Sustainable Development

This annual assessment of corporate accountability, compiled by international think-tank AccountAbility and consultancy Csrnetwork, with support from data provider Asset4, shows that Vodafone has regained the top spot, the position it occupied in 2006. A wide range of initiatives from mobile based banking and education for the rural poor, to developing e-waste facilities in emerging markets demonstrated that it is embedding responsible business practices into a wide range of its operations.

The top ten companies in the 2008 Rating are:
1) Vodafone
2) General Electric
3) HSBC
4) France Telecom
5) HBOS
6) Nokia
7) EDF
8) GDF Suez
9) BP
10) Royal Dutch/Shell

Now in its fifth year, the Accountability Rating measures the extent to which companies build responsible practices into the way they do business and their impact on the economies, societies and environments in which they operate. It does this through assessing information made available by the companies themselves across four domains: strategy, governance and management, engagement and operational performance.

This year’s results show that almost all of the companies in the G-100 have broadened their definition of responsibility. Many of them are not just recognising and mitigating risks, they are also looking at how they can evolve existing products and services, or create new ones, to address major social and environmental challenges like human rights and climate change.

Other key findings of the 2008 Accountability Rating are:

– Companies headquartered in Europe are the most accountable, with Asian companies retaining a slight lead over the 31 companies based in the United States.
– French companies are challenging the British leadership in corporate responsibility. There are now four British (average Rating score 59) and three French companies (average Rating score 55) in the top ten, together with one each from the US, Finland and Holland.
– Most companies within the G-100 (78%) are now disclosing targets for their environmental performance. However, a little less than half are actually saying when they plan to achieve these targets
– 75% of companies are reporting on their carbon emissions, but despite major public awareness campaigns, just 43% report a decrease in these emissions.
– Financial companies including HSBC and Barclays are showing continued improvement in the manner in which they discuss environmental, ethical and social responsibility aspects of their core business strategy. However, as the case of HBOS (5th) demonstrates, a strong performance on the Accountability Rating does not necessarily ensure companies have managed to protect themselves against the credit crunch. Companies are undertaking a range of new efforts to adopt more responsible lending policies, but these would have had to be taken more seriously years ago in order to avoid the credit crunch.
– With three companies in the top ten, the telecommunications sector is clearly looking to seize the opportunities that would come from bringing large numbers of people into the information age, allowing currently excluded parts of the world’s population to benefit from modern communication technology.
– The retail and fast moving consumer goods (FMCG) sector scores relatively poorly as companies struggle to manage social and environmental issues along their vast supply chains. Although there are significant improvements in performance from companies like Wal-Mart, only Tesco features in the top 25.

As the global economy enters increasingly muddy waters, companies are likely to look for savings opportunities. Social and environmental management efforts may therefore find themselves under the financial spotlight. However, the Accountability Rating research confirms that not all accountability initiatives are costly, In fact, some of them may be beneficial during the current economic crisis. Apart from managing risks, a responsible business may find profitable solutions for some of the most pressing social and environmental challenges.

Regional Accountability Ratings are also being produced for Bulgaria, Greece, Hungary, Italy, Korea, Portugal, Russia and Turkey.

The World Business Council for Sustainable Development noted that seven of the top ten companies listed in this year's list are WBCSD members  - Vodafone, General Electric, Nokia, Electricite de France, Suez, BP and Royal Dutch/ Shell. And, among the top 100 on the full list, 34 are WBCSD members. “What this shows,” said Bjorn Stigson, President of the WBCSD, “is that sustainable development and business success go hand-in-hand, even in these financially difficult times. Transparency, accountability and engagement with stakeholders are all key tenets of sustainable business. That so many companies embrace them shows they are good business, too.”

Posted 11/17/2008

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Leading the World in Corporate Responsibility – New Survey of 600 Firms in 27 Countries Finds Toyota Leads With Google A Close Second

The Reputation Institute publishes - The Global Pulse 2008

The World’s Best Corporate Reputations” according to the survey are:

1. Toyota (Japan)
2. Google  (US)
3. IKEA  (Sweden)
4. Ferrero (Italy)
5. Johnson & Johnson (US)
6. Tata Group (India)
7. Kraft Foods (US)
8. Novo Nordisk (Denmark)
9. Grupo Bimbo (Mexico)
10. Migros (Switzerland)

In 2006, Reputation Institute introduced the RepTrak™ Model - a simplified and standardized scorecard for measuring corporate reputations internationally. The beating heart of the model is the Pulse – the degree to which people trust, admire, respect, and have a good feeling for a company. Scores are based on answers to four questions and are standardized on a scale of 0-100.

The Global Pulse 2008 is the third annual study of the reputations of the world's largest companies. The study was developed by Reputation Institute to provide executives with a high-level overview of their company’s reputation with consumers. Conducted annually since 2006 results from the study have created a robust database of reputation ratings for the world’s largest companies in their home markets. Over 60,000 members of the general public from 27 countries participated in the study in February and March of 2008 providing detailed information on how much trust, admiration, respect, and good feeling they have for the world’s largest companies. In total, more than 150,000 ratings were used to create reliable measures of the ‘corporate reputation’ of more than 1,000 companies. Additionally, respondents provided information on what drives these feelings rating companies’ performance along the seven dimensions of reputation.

The Reputation Institute stated that a core part of corporate reputation is the perceptions of a company’s social, or institutional, activities. People wonder:

- is this company a good corporate citizen?
- is this company well governed in its business dealings?
- is this company an appealing place to work?

Understanding the rankings
Rankings along the corporate social responsibility index aim to give companies a better sense of how the totality of their institutional activities are perceived by the general public. These rankings are not based on self- reported corporate information but over 20,000 ratings from people familiar with the company across the United States.

Best US Companies

The study includes a ranking list of leading US corporations with research added from the Bost College Center for Corproate Citizenship.  "Although the survey was taken before the Wall Street collapse, the U.S. findings show that corporate governance-ethics and transparency-are increasing in their importance to overall corporate reputation," said Philip Mirvis, senior research fellow at the center. "This is the first time we see how the public votes on how companies operate as corporate citizens," said Mirvis referring to the survey that asked the public to judge a company on how it treats employees, its ethics, and its community involvement and respect for the environment.

By focusing on the three dimensions of corporate citizenship, governance and workplace practices surveyed for the larger Global Pulse Study, Reputation Institute and the Boston College Center were able to gain greater insight into the combined influence on reputation of social programs, management practices, and employee relations.

These three measures account for more than 40 percent of a company's reputation, according to Reputation Institute's analysis. This makes it critical for companies to communicate how they support good causes, protect the environment, treat their employees, and run their business ethically.

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CSR Trends in South Korea:
Data Shows Sustainable Companies Have Higher Performance

The Swiss-Korean joint venture SolAbility, which specialized in sustainability analysis, conducted research on how leading sustainable companies in South Korea match up against other companies listed on the Korean Stock Exchange.  The study found that since 2002, the leading 34 Korean sustainable companies, out of 350 companies listed, outperformed the others by 220% and since 2007, surpassed the others by 110%. 

According to the SolAbility press release, the study was conducted based on industry peer comparisons, using over 400 indicators and 60 types of sustainability criteria, across 29 different industry sectors.

The study notes that sustainable investment in South Korea has increased since 2006, “initiated by a public bidding announcement for ESG-managed funds by the National Pension Fund.”  The following chart shows the number of sustainable investment retail funds created since May of 2006.

Overall, corporate social responsibility (CSR) trends in South Korea have become more common, according to the study, but are not as entrenched in business compared to other countries.  The following is a list of successes and challenges noted in the report that South Korea has experienced in different areas of CSR   

CSR Strategy and Sustainability Reports

Success: Since 2001, the number of companies publishing sustainability reports went from zero to 55%.  There is still a strong sense of corporate philanthropy in South Korea, which has been in place for a long time.

Challenge:  CSR is less fully integrated into business strategy and management thinking.  Korean companies still have room to improve their strategic use of CSR, the report says.

Corporate Governance

Success:  Most Korean companies have a formal governance framework in place.

Challenge:  Although the government has been encouraging stronger board independence, truly independent boards are less common.

Code of Ethics

Success:  Most companies have their own ethics codes.

Challenge:  There is still a high level of violations of the Code, especially with regard to illegal price agreements between companies.

Energy Efficiency

Challenge:  South Korea’s economy is very dependent on high-energy use industries, according to the report.  There is a need to take energy efficiency more seriously.

Climate Change

Success:  Some companies are really taking the lead by voluntarily cutting emissions.

Challenge:  Based on the current Kyoto agreements, South Korea is not obligated to cut its emissions.  This has made it more difficult to get a majority of companies to do so, according to the report.

Workforce

Success:  South Korea has a very well educated workforce.  Most companies are implementing performance incentives for their employees.  Safety standards are also very high in most companies.

Challenge:  South Korea’s population is aging fast, a trend many companies have not fully addressed.  There is also a need, according to the report, to address new employee issues such as stress management and a fair work-life balance.

Posted 9/4/08

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Ceres Says Companies Making Significant Commitments to Climate Change Goals

A record number of 57 climate-related shareholder resolutions were filed with U.S. companies during the 2008 proxy season.

A group of investors, environmental groups and public interest organizations working together to improve investment in environmental sustainability recently report a marked increase in support for shareholder resolutions regarding environmental commitments. 

The network, called Ceres, said investors engaging with U.S. companies on the financial risks and opportunities from climate change achieved breakthrough results during the 2008 proxy season.  A record 57 climate-related shareholder resolutions were filed with U.S. companies, of which nearly half were withdrawn after the companies agreed to positive climate-related commitments.  Remaining resolutions that went to a vote received record high average voting support of 23.5 percent, including 39.6 percent support for a resolution filed with coal company CONSOL Energy, the highest vote ever on a global warming shareholder resolution.

“Growing investor pressure is prompting more companies to see the value of making environmentally sound products,” said Mindy S. Lubber, president of Ceres.  “By re-thinking their strategies with high energy prices and climate change in mind, these companies will have a distinct competitive advantage in the years ahead.”

Shareholders also filed first ever resolutions with oil companies on the far-reaching environmental impacts from Canada’s tar-sands oil extraction project. Resolutions with ConocoPhillips and Chevron received strong support of 27.5 percent and 28.6 percent, respectively.

The 2008 global warming resolutions, seeking emission reductions and greater disclosure from companies on their strategies to address climate-related business trends, were filed by state and city pension funds and labor, foundation, religious and other institutional shareholders. The filers collectively manage more than $300 billion in assets.

In addition to the 57 climate-specific resolutions, 26 other resolutions were filed asking companies to provide a sustainability report to investors which would include information about how the company is managing climate risk, among other social, environmental and governance issues.  A record 80 percent of these resolutions were withdrawn after the companies agreed to issue a sustainability report to shareholders or committed to produce an in-depth report on sustainability policies and performance.

The following are a list of highlights from the 2008 proxy season, also highlighted, with a full press release, on Ceres’ website.

Posted 8/22/08

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Ethisphere Magazine Ranks Companies Worldwide Based on Its Set of Ethics Criteria

Top ranked companies mostly US-based

Ethisphere Magazine has released its 2008 list of what it calls the “World’s Most Ethical Companies.”  The business ethics magazine annually publishes the top companies in a wide range of industries it considers to best meet its criteria for an ethical company.  Some of the top companies from this year’s list includes: Alcoa in mining, Honeywell International in defense, Dole Food Co. in agriculture, Nike in apparel, BMW in automotive, Gap in retail and Accor in travel, to name just a few.

Ethisphere states that of course, no business is perfect.  Therefore, its criteria take into account how companies respond to challenges, “such as complete transparency for the public and significant effort given to fixing the core problem.”  

Researchers looked at company history as far back as five years and included lesser-known cases brought against companies, a point which Ethisphere says knocked some 2007 companies off the list.  The methodology used reflects seven broad categories which represent Ethicsphere’s view of an “ethical” company.  The seven categories used were:

1) Corporate citizenship and responsibility (20%)

2) Corporate governance (10%)

3) Innovation that contributes to public well being (15%)

4) Industry leadership (5%)

5) Executive leadership and tone from the top (15%)

6) Integrity track record and reputation (20%)

7) Internal systems and ethics/compliance program (15%)

The pool of companies the researchers analyzed included public and private companies worldwide.  Eligibility requirements were that the company must have an annual turnover of over $50 million (or its equivalent), or the company employs 100 or more people. 

The following is a list of the top listed company in each category.  To see the complete list, visit the Ethisphere website. You can also post your comments about the list on the website's blog.

Posted 6/6/08

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Global Reporting Initiative Collects Feedback from Sustainability Report Readers

Sustainability reports viewed as useful, but should include more relevant stakeholders

Readers of sustainability reports overwhelming state that company communication on corporate social responsibility initiatives has a positive effect, according to a new survey from the Global Reporting Initiative (GRI), but a large number of readers also say these reports lack an honest assessment of company shortfalls.  The sustainability standard-setting organization, based in the Netherlands, has completed its first ever survey of readers’ perceptions of sustainability reporting.  The purpose of the survey, according to GRI, was to collect information on who reads sustainability reports and what readers do with them.  GRI believes that the results are a good assessment of where companies are getting it right and where they are getting it wrong.

The international auditing firm KPMG and global sustainability consulting group SustainAbility designed the survey, in which 2,279 people participated from around the world, and analyzed the results.  The vast majority of respondents were from Western Europe, and the second largest group came from Latin America.  Of the total number of people surveyed, 1,827 people said they read sustainability reports while 452 people said they did not.

Of those people who read sustainability reports, 90 percent said the reports were influential and 85 percent said they had a positive influence on their perceptions of the reporter.

Why readers find sustainability reports useful

Individuals responded from a number of different sectors: business, consultancy, civil society, academic/research, investment/rating, individuals, and public agencies.  They also gave a number of reasons why they read sustainability reports:

• 60% wanted a better understanding of how an individual company approaches sustainability
• 40% were interested in benchmarking and making comparisons between company reports
• 50% of respondents from civil society used reports for education and research
• 35-40% of respondents from civil society looked specifically for a company’s accountability to society
  
  

Although various responses were given for why sustainability reports are useful, the survey noted that essentially, there is very little difference in readers’ core values.  There is a common understanding of what sustainability means to business, so reporters should be less concerned about catering to different groups in this respect.

Still room for improvement

The perceptions of sustainability reporting were generally positive, but some concerns were also raised.  A total of 25 percent of readers agreed that the most significant sustainability impacts, or issues, were left out of reports.  The most common missing element given was “failures.”  In addition, 55 percent want to see more critical stakeholders express their views on the company’s sustainability initiatives.  Overall, a majority of readers said including assurance in the report was also extremely important, but there were mixed opinions on who should deliver the assurance.  The report suggests companies may want to consider giving different types of assurance for various portions of the report which would satisfy different groups of readers.

The report named six areas where readers want to see more in sustainability reports:

• Link between the sustainability strategy and business strategy – readers want to see how the company is managing, governing and integrating sustainability into its business model
  
  
• Commitment to sustainability – readers want to see a genuine, open dialogue about sustainability that will transfer into practical results
  
  
• Sustainability impact of the organization – readers believe both direct and indirect sustainability impacts are important 
  
  
• Actions taken to address sustainability issues – readers want to see specific data on what the company is doing to address issues in company strategy, operations, product development, sales, relationships with customers, investors, government and other stakeholders
  
  
• Innovative thinking – readers want to know details of the company’s process of thinking about the future and how new ideas are being encouraged
  
  
• Translation of sustainability to local business – readers want to know how policy and action are being translated on the ground
  
  

How to address non-readers

The report shows a large majority of survey respondents reads sustainability reports and recognizes their value, but a significant number of respondents said they did not read sustainability reports.  Many non-readers believed reports were often too lengthy and tried “to be all things to all people.”  In short, many non-readers believe the reports contain “too much information and too little meaning.” 

Other reasons given for ignoring sustainability reports:

• One-third said they did not understand the value of sustainability reports
• One-fourth said there were other more useful means of gathering the same information
• One-fifth said they didn’t know how to use the reports for making business decisions
  
  

GRI believes this kind of feedback could be very useful for sustainability reports that want to capture a larger audience.  The report includes a larger set of recommendations for reporters based on the results of this survey.  The recommendations are represented in the following chart:

Posted 5/27/08

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Study Tracks Trends in Global Corporate Human Rights Abuse Allegations

Allegations of corporations’ involvement in human rights abuses are not particularly uncommon.  However, until recently there has been no resource available or study done to track trends and patterns in the large number of cases.  Michael Wright, research fellow for the Corporate Social Responsibility Initiative at Harvard University, undertook the project along with the Business and Human Rights Resource Center.  The resource center has been collecting human rights abuse allegations made against companies on its website for the past couple years and allowed companies to respond to these allegations.  Wright used the webpage as a primary resource to collect data for his study.

From the website, Wright whittled down 320 cases brought between February 2005 and December 2007.  The goal of the survey was to report data trends and to analyze how the abuse occurred.  The following are some of Wright’s key findings.

Trends in the Data

All of the cases cover the full range of human rights abuses, not just labor abuse.

The most common labor rights claimed to have been impacted were:

• the right to work (34%)
• the right to just and favorable remuneration (30%)
• the right to a safe work environment (31%) 
• the right to rest and leisure (25%)
  
  

Non-labor rights abuses occurred frequently as well. The right to physical and mental health appeared as an alleged impact in nearly 75% of all the cases.  Other common abuses included:

• the right to life, liberty and security of the person (44%)
• the freedom from torture or cruel, inhuman or degrading treatment (57%)
• the right to social security, self-determination, privacy, and education (20-25%)
  
  

In most cases, the abuse impacted several rights simultaneously

Often allegations of abuse in one area spurred further allegations.  The report gave the example that where a firm was reported to use child labor, the circumstances of the case might also give rise to alleged impacts on the right to education, freedom from torture or cruel, inhuman or degrading treatment, the right to health, and even the right to life.

Environmental harm and corruption were often related to human rights abuses

In 60 percent of the cases, companies were directly involved in the abuse.  The remaining 40 percent were cases of indirect involvement by companies.

Both workers and communities were affected equally as often and the abuse in both areas was caused by companies in all regions and in every sector, except in the finance sector where no allegations were brought for abuse against communities.

Abuse against “end-users,” which the report describes as company actions that cause abuse to those who use its products and services, was found in 16 percent of the cases.  This type of human rights abuse was generally relegated to pharmaceutical companies where cases centered on issues of access to essential medicines and industries’ lack of research into diseases primarily affecting persons in poorer regions.

Lessons Learned

The report also includes several case examples of human rights abuses against workers and against communities.  Environmental impacts were particularly harmful to communities, the report shows.  In many such cases, Environmental Impact Assessment were either never carried out or carried out incompletely which in the end, affected community members’ right to an adequate standard of living, right to food, right to access to medical care, etc.  The need for transparency is particularly important in this area, the report points out. 

Indigenous people were also often targets of corporate abuse. Cases frequently coupled more direct forms of company involvement with the abuses of third parties, the report said, the forms of abuse were overridingly direct.  Some cases even alleged that firms made an express request for third party abuse of indigenous rights, e.g., requesting security forces to carry out abusive acts such as offensive use of force and intimidation—a potentially direct form of involvement on the part of the company.

Overall, Wright urges companies to look outside just the workplace in order to protect human rights.  Abuse throughout the supply chain and through unethical investments were examples which highlight the need for companies to be aware of their actions worldwide.  The tendency to have a narrow view of company actions leaves the door wide open for an abuse that could have a domino effect.  Companies should consider the environments in which they work because often, their actions can play into already unstable social, environmental, political and economic situations.  Finally, the report also emphasizes the importance of companies that respond to these allegations quickly.  It is a critical part of their efforts to uphold international human rights standards.

Posted 5/2/08

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CRO Ranks 100 Best Corporate Citizens 2008 with Newly Revised Criteria

Intel Corp ranks number one overall

For the ninth year in a row, the Corporate Responsibility Officer ranked what it found to be the 100 best U.S.-headquartered companies based on corporate social responsibility criteria.  Companies were scored on 150 different data elements within eight categories.  Each category was then weighted to average a total score.  The categories Environment and Climate Change were weighted the highest, while a newly-added category Lobbying carried the least weight.

This year, CRO altered some of its methodology in order to improve the survey.  CRO used only publicly available sources “on the theory that transparency is a basic principle of the Corporate Responsibility profession.”  The 2008 rankings include only companies included in the Russell 1000.  A new ranking provider was used to reflect a stronger emphasis on Environmental, Social, Governance rankings (ESG).  Finally, a Lobbying category was added, but carried the least weight since “lobbying in itself isn’t necessarily ‘good’ or ‘bad.’”

The final eight categories include Environment, Climate Change, Governance, Employee Relations, Financial, Human Rights, Lobbying, and Philanthropy.

The following is a list of the top 10 ranked companies.  Please view the whole list on CRO’s website.

Source: www.thecro.com

Posted 2/22/08

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Survey Tracks Sustainability Reporting in Emerging Markets

South African companies were found to be the clear leaders in corporate social responsibility disclosure among emerging market companies, according to a report published by the Social Investment Research Analyst Network (SIRAN), KLD Research & Analytics, and the Social Investment Forum.  The report attributes this strong performance to the fact that the Johannesburg Stock Exchange listing requirements are set comparably high.

The survey, which was conducted in seven countries with 75 companies, is the first step in a larger project to boost sustainability reporting in emerging market countries.  According to the report, the ability to discern the social and environmental risks to investment in emerging market economies is a difficult task due to a lesser degree of sustainability reporting.  Now that the report has been produced, the next steps in the project will include an investor sign-on statement to demonstrate support for this issue, launching an advocacy campaign and creating an updated benchmark report to be conducted in 2009.

Five questions were asked regarding the level of sustainability reporting each company was at. 

1. Does the company have any public disclosure of sustainability issues?
2. Does the company have a separate section of its website and/or annual report addressing sustainability issues?
3. Does the company publish a current (within the last two years) and stand-alone sustainability report?
4. Does the company reference the Global Reporting Initiative (GRI) framework for its stand-alone report?
5. Does the company report sustainability goals and benchmarks?

The energy sector companies showed the strongest reporting out of the three sectors surveyed – energy (oil and gas), materials (metals and mining), telecommunications.  South African companies lead every criteria section, with six companies out of eight meeting all five criteria standards.  Other countries surveyed were Brazil, China, India, Russian, South Korea and Taiwan.  China was the country that had the most room for improvement, overall.

A strong percentage of companies did some type of sustainability disclosure (87%), while only 27% of companies published reports that made reference to the GRI framework.  The report suggests using GRI is a very new concept in most countries and is starting to gain more traction.  Other barriers were more technical in nature, such as broken links, dysfunctional websites, or blurry downloads.  

Posted 2/6/08

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Gap Exists Between Corporate Attitudes and Corporate Behavior

American companies’ actions are not living up to their words, according to a recently released report called “The State of Corporate Citizenship in the US.” The Boston College Center for Corporate Citizenship teamed up with the Hitachi Foundation to find out how companies are actually performing with respect to their corporate citizenship reporting. 

"While 41 percent felt that companies should be held responsible for improving the education and skills in the communities where they operate, only 18 percent of business are offering job training to people in economically distressed communities," said Barbara Dyer, President and CEO of The Hitachi Foundation.  The report also contains the following significant findings:

Rhetoric: 73% of executives say corporate citizenship needs to be a priority for companies.

• Reality: 60% report corporate citizenship is part of their business strategy
• Reality: 39% report corporate citizenship is part of their business planning process
• Reality: 28% of companies have written corporate citizenship policies or statements
  
  

Rhetoric: 65% of executives say the public has a right to expect good corporate citizenship

• Reality: 29% report discussing citizenship outside the company with stakeholders
• Reality: 21% of companies report to the public on corporate citizenship issues
  
  

Rhetoric: 81% of executives see the importance of valuing employees and treating them well

• Reality: 54% offer health insurance to all employees, including hourly workers
• Reality: 52% of companies have written human rights policies that prohibit discrimination
• Reality: 46% of companies support work-life balance practices for all employees, including hourly workers
• Reality: 31% provide training and career development for low-wage employees
  
  

The report also makes clear that the public expects way more from companies than they are doing.  Attitudes toward corporate citizenship are more positive from the public’s perspective than from the company’s perspective, according to the Center for Corporate Citizenship website.  The gaps that exist between corporate attitudes, public expectations, and corporate behavior is a clearly an issue that still needs to be addressed.

Download report for free at the BCCCC website.

Posted 1/29/08

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2007 AccountAbility Ratings for Corporate Social Responsibility

BP tops the list and European companies dominate

AccountAbility, an international non-profit organization committed to providing accountability in sustainable development, has released its Accountability Rating 2007.  The rating, which was first applied in 2004, ranks the “Fortune Global 100” companies based on their public reporting and actual social and economic performance data. 

Each company is assessed in four key areas of corporate social responsibility (CSR) – Strategy, Governance, Engagement and Impact - all weighted equally. 

Top Ten Rated Companies (Source/Accountability)

In this year’s rating, some significant findings emerged:

• An overall higher score in the Strategy domain indicates greater boardroom understanding of and participation in CSR.
  
  
• Scores in the Engagement domain was low – companies seem to be devising strategies based on their own perceptions rather than engaging stakeholder views.
  
  
• Independent assurance for sustainability reports is lacking.
  
  
• European companies lead in all four categories; American companies dominate the bottom 20.
  
  
• Companies with the most improved ratings from 2006 are Sinopec, ENI, China National Petroleum, and ING.
  
  

The full list of ratings for the Fortune Global 100 can be found on AccountAbility’s website, along with ratings for companies in individual countries, including Russia, Hungary, Turkey, Greece, and South Africa.

Posted 1/22/08

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McKinsey Says Globally, Executives Believe Environment Will Be Top Social Factor to Affect Business

Results of a McKinsey Quarterly Global Survey indicate that the environment, including climate change, is the top social issue that companies believe will affect shareholder value the most. Over half of the respondents said the environment was the biggest issue, compared with 31 percent from the previous survey. Nine out of ten respondents say they themselves worry about global warming. 

The survey also shows executives in Europe indicate more frequently than the global average that climate change is the top social issue, whereas North Americans put health care benefits in the top three most important social issues – almost double the global average. Indians choose privacy and data security as the top social issue, which just edges out the environment, and the Chinese choose corporate political influence. 

Issues Most Likely to Gain Public and Political Attention Over the Next 5 Years
(Results taken from McKinsey data table, see report for full data set)

% of respondents selecting given issue as 1 of top 3

Posted 12/10/07

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Top 10 Best U.S. Corporate Citizens of 2007

The Corporate Responsibility Officer magazine has teamed up with IW Financial to determine the “Top 10 Best Corporate Citizens” across five industries.  U.S. publicly-traded companies in the areas of chemical, energy, financial, media, and utilities were evaluated on how well they performed in the following areas: environment, climate change, employee relations, human rights, lobbying, philanthropy, corporate governance, and finance.  The methodology was modified slightly from CRO’s previous study of “100 Best Corporate Citizens” to include emerging issues, available information, and a new approach to company comparisons, according to the CRO website.

IW Financial relied on data from several sources. IW Financial reviews company financial disclosures, sustainability/environment/citizenship reports, websites, Environmental Protection Agency databases, and other sources as part of its standard research processes.

Each company received a score within each evaluation area, and the companies with the highest scores ranked highest within each industry.  The following table represents the top three companies ranked in each industry.  For a full list of the top 10 rankings and a breakdown of scores the companies received in each category, please download the survey from the CRO website.

Also see EthicsWorld coverage of CRO's "100 Best Corporate Citizens 2007"

Posted 12/11/07

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Key Differences Seen In CSR Performance by Companies from Different Countries – Ethical Investment Research Services Releases International Survey Findings

The data suggests that European companies have the strongest overall CSR performance, although the Japanese are first in environmental standards.  North American companies lag significantly behind Europeans in all CSR areas.  

Ethical Investment Research Services conducted a study of global corporate social responsibility practices, which covers a range of research areas including environmental, social, and governance impact.  Although the study claims to be a global response to these issues, the companies surveyed are American, West European, Asian, and Australian/New Zealand.  The findings provide an interesting overview of which countries are taking corporate social responsibility more seriously.  The following is a listing of the report’s major findings by issue. The full report provides more explanation for why some countries may be performing better than others.

Posted 9/20/07

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Hudson Report Evaluates Employee Attitudes Toward Corporate CSR Programs

How Important is CSR to U.S. Employees? Not very, says Report
But Older and Higher Paid Employees Appear to Be More Concerned About CSR Than Younger Ones

As social pressure rises for companies to implement meaningful corporate social responsibility programs, one might expect the quality of CSR programs to be a more significant factor when people apply for jobs in the US.  However, a survey released by Hudson finds that just seven percent have turned down a job offer for lack of a CSR program. Hudson is an international firm engaged in recruitment, contract professionals, and talent management services.

A high percentage of U.S. workers participate in corporate social responsibility (CSR) programs, including volunteer and community-oriented programs, if they are offered, but they don't go out of their way to work for a company that has such a program, according to the Hudson survey which was conducted in August.

Three-quarters of U.S. workers still think companies have the responsibility to give back to their community.  The idea that companies’ obligations go beyond shareholders and investors to the greater good of society increases with age.  For example, two-thirds of those who are between 18-29 years of age agree with it, compared to 83 percent of those over 65. It also tends to increase with income. Only 64 percent of those who earn less than $20,000 think companies are responsible for the greater good, compared to 80 percent of those who earn $75,000 to $100,000.

The study confirmed that CSR programs are more prevalent at large companies, with 58 percent of respondents who work for a company with 500 or more employees state their firm has a CSR program, compared to 45 percent of all workers.  Of those workers employed by a company with a CSR program, nearly two-thirds participate in it. Among the small number of companies that allow employees to take paid time off to volunteer for community projects, 70 percent take advantage of it. Hudson analysts suggest that for an employer, having a formal CSR program is not as important for recruiting employees, but for retaining them.  "Participating in a charitable activity not only builds strong team dynamics but also makes an individual feel like he or she is helping the organization give back to society. Those positive feelings reflect back on the employer,” said Peg Buchenroth, senior vice president of human resources at Hudson.

The Hudson CSR survey is based on a national poll of 2,000 U.S. workers conducted August 4-5, 2007 and was compiled by Rasmussen Reports, LLC, an independent research firm.  To read more about the survey, click here.

Posted 9/14/07

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Study Says Long-Term Effects of Climate Change on Agriculture Could Be Unmanageable Unless There are Major Policy Changes in Coming Years

The Study, by William Cline, Implies Considerations for Key New Approaches By All  - Including Business.  Dramatic Losses in Global Agricultural Yield Forecasted for Late This Century

“Global Warming and Agriculture – Impact Estimates by Country” by Dr. William Cline

Dr. William Cline, senior fellow at both the Center for Global Development and the Peterson Institute in Washington DC, highlights in his new study, “Global Warming and Agriculture,” powerful statistics about the impact that temperature increases will have on crop yields in over 100 countries by the 2080s (between 2070 and 2100) if efforts are not taken to reduce carbon emission and other greenhouse gases. 

The effects of the decline would filter into many areas of international development including foreign aid flows, global health, and overall standards of living, all of which would greatly impact business strategies. Cline’s analysis focuses on the long-term effects of global warming, and he argues that if leading public and private sector institutions are going to take the welfare of future generations seriously, they need to reconsider long-term sustainability strategies.

At a time when major corporations are significantly increasing their attention on CSR approaches, with strong emphasis on the environment, the new Cline study represents a wake-up call.  His predictions not only add to the long list of arguments for taking action to reduce greenhouse gas emissions, but they provide an exceptionally detailed set of forecasts for the key agricultural sector. They point to especially harsh consequences for countries that are located close to the equator.

Nancy Birdsall, president of the Center for Global Development, said Cline’s book serves to motivate individual countries “getting to yes” on implementing far reaching approaches to carbon mitigation.  Developing countries will suffer the biggest losses.  Cline predicts Latin America and Africa could sustain a 20 to 25 percent loss in crop yield, while Southeast Asia could lose as much as 30 to 40 percent.  Cline said agriculture is one of the world’s most basic resources, and at the same time, the most vulnerable to global warming.  Much of the global South depends on the agricultural industry to earn a living.  A major blow to this industry would be devastating. 

Fred Bergsten, the director of the Peterson Institute, said that Cline’s study “shows that although the two largest polluting countries, China and the United States, will not yet suffer overall agricultural losses by late this century, both will experience substantial internal regional losses that should persuade them to participate in action to avoid severe domestic dislocations.”    

Cline challenges the notion that a few degrees increase in temperature will be positive for agriculture by calling it “a short-term view.”  He cites evidence that agricultural production has already started to decline in the U.S. since the 1960s.  Cline predicts that demand for food will increase significantly, which when coupled with a decline in production, could mean very serious food shortages.

John Lash, President of the World Resources Institute, adds that we will see climate change even if we do take action, probably a rise of two degrees Celsius.  He believes it is necessary to plan for these changes now, especially in developing countries that will be most affected, so that the problems become more manageable in the future. 

“Governments and millions of poor people in developing countries have limited ability to cope with such changes,” Birdsall said. “At least a billion people live in the poorest countries that are likely to be worst hit by this slow-moving crisis.  This will be a serious problem for us all."

The Center for Global Development website

The Peterson Institute of International Economics website

Posted 9/14/07

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