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  • andrea 9:10 am on November 19, 2012 Permalink | Reply
    Tags: accoun, corporate responsibility, ethical business practices, , stakeholder,   

    Corporate responsibility: protecting the bottom line 

    Following a week in which BBC executives in the UK have squirmed to offload responsibility in the wake of the vile Jimmy Savile child sex scandal, HSBC fights new allegations of unethical business practices in Jersey, and BP has agreed to $4.5bn in fines relating to the Deepwater Horizon disaster in the US, the case for corporate responsibility (CR) could not be stronger.

    For BP, this is only an interim settlement. Clean Water Act claims could see the bill rise to $21bn according to the International Herald Tribune, while Bernstein Research puts the cost of the spill as high as $41.9-59.4bn. For HSBC, the offshore accounts scandal is just the latest in a series of systemic corporate responsibility failures—from involvement in Libor-rigging and the US subprime lending crisis, to mis-selling of payment protection insurance (PPI) in the UK and money laundering in Mexico—for which the company expects fines to top $1.5bn, according to CSMonitor.com. The long-term damage to its brand may be far greater.

    These headlines showcase what happens when adequate safeguards are missing and a culture of unaccountability is allowed to grow. Of course it’s impossible to say problems like these won’t arise for companies with robust CR systems. But they’re more likely to be detected, less likely to go as spectacularly wrong, and can be resolved more swiftly, effectively and amicably when they do arise. CR has a vital role—in preventing things from going wrong as well as in helping to put them right.

    Last week also marked the 60th anniversary of what is perhaps the greatest example of abuse and atonement. Since 1952, Germany’s post-war reparations program has paid out compensation totaling US$89bn to victims of the Nazis. During this time, the agreement has been altered to make it easier for survivors to claim and the German Finance Ministry and the Claims Conference—representing the victims—have worked as partners with the shared goal of reaching as many survivors as possible. For Julius Berman, chairman of the Claims Conference, it is less about money and all about recognition. For Werner Gatzer, leader of the German negotiations, it’s all about responsibility: Germany, he claims, will only have done enough when no more survivors remain. “As long as they live, we will uphold our responsibility.”* It’s a mindset the BBC, BP and HSBC could certainly learn from.

    Five key steps can help companies stay on the right track:

    1. SUSTAINABILITY RADAR: continuously revisit your awareness of material issues, assessment of risks and regulation, grasp of global standards, and map emerging societal expectations.
    2. SYSTEMS RESILIENCE: ensure high-performance risk management, emergency response and business ethics programs are in place, supported by a positive culture of continuous improvement, where questioning and the precautionary approach are encouraged and rewarded. Integrate your sustainability priorities and values into your business goals and strategies so employees don’t face conflicting expectations.
    3. STAKEHOLDER RESPONSIVENESS: engage with relevant stakeholders around materiality and risk monitoring to increase awareness, improve management and build a shared sense of responsibility, partnership and collaboration for when things go wrong.
    4. REPUTATION & GOODWILL: don’t take trust for granted—it’s hard to put a value on it until it’s gone. Invest boldly in preventing CR lapses and make transparency a core principle.
    5. ACTIVE ACCOUNTABILITY: when things do go wrong, be the first to acknowledge it, and respond quickly and visibly to put things right. Direct efforts into finding out how it happened and ensuring it never happens again, not into trying to offload the blame or cover up misdemeanors.

    Your bottom line will thank you for it.

    *[IHT, Sat-Sun Nov 17-18 2012; p.3]

     

     
  • ChristineNT 6:42 am on March 26, 2011 Permalink | Reply
    Tags: , corporate responsibility, Edelman, Japan, , , Tepco,   

    In Search of a Positive Side to Japan’s Nuclear Disaster 

    Glued to the daily news as we all are, the question still unanswered following the Fukushima Daiichi disaster is, what is really going on there? How much radiation is leaking and what are the true dangers for the people living and employed in the region, especially those left working at the plant? No one seems able to answer this question. Prime Minister Naoto Kan learned about the first explosion in Reactor 1 a full hour after the fact and since then seemed in some denial about the events.

    While Japan’s preparation and handling of the earthquake and tsunami may be commendable, there is much to be learned from the information management associated with the power plant crisis. Transparency, or lack thereof, comes first to mind. Historically this is not an area where the Tokyo Electric Power Company (TEPCO) has excelled. Given their somewhat imperfect past, (read more about historical cover ups here) it is easy to be suspicious of TEPCO, and man-on-the-street reports indicate Japanese consumers aren’t exactly trusting. Latest Edelman Trust Barometer 2011 figures from the Annual Global Opinion Leaders Study find that just over 50% of Japanese surveyed believe they can trust government to “do what is right,” up from 42% last year. Slightly more consumers, 53%, trust companies to “do what is right,” but interestingly, this figure is down from last year’s 57%. After the events of the last weeks, what will next year’s numbers show?

    Edelman’s study found that what matters most for a corporation’s reputation are “quality, transparency, trust, employee welfare.”  Currently, TEPCO is failing in all of these areas. But TEPCO’s dashed reputation may be positive in more than one way.

    Japan’s disaster has sent many of the other nuclear-powered countries around the world scrambling to review and validate their own safety measures. That can only be positive.

    Nuclear may still have a role to play in the global power mix, but clean energy can’t help but shine brighter in comparison. Perhaps the legacy of Fukushima will be clean power alternatives getting the attention and funding they deserve.

     
  • andrea 8:37 pm on February 17, 2011 Permalink | Reply
    Tags: corporate responsibility, ,   

    United Nations Global Compact ups the ante on Corporate Sustainability with LEAD 

    Last month, in Davos, Switzerland, the United Nations Global Compact (UNGC) launched its new platform for corporate sustainability leadership – Global Compact LEAD.

    Leading light

    With a name like a high efficiency lightbulb, it’s hoped LEAD will indeed shed light on how companies can drive sustainability transformation in this critical phase out to 2020.

    While many organizations are still struggling to come to grips with implementing the Global Compact in its most basic form, LEAD takes it to the next level.

    Designed to challenge those companies already strongly committed to the UNGC, LEAD aims to drive integration of the Blueprint for Corporate Sustainability Leadership – the roadmap for future evolution unveiled at the Global Compact Leaders Summit in June 2010.

    Incubator

    Through LEAD, it’s hoped companies will embrace new levels of performance and ambition in tackling the world’s social, environmental and economic challenges. A forum for experimentation, innovation and knowledge sharing, participants will be expected to demonstrate strong engagement at global and local levels to implementing the Blueprint. As well as encouraging leadership, LEAD will serve as “an incubator for collective action … to address challenges and dilemmas that no entity or sector can solve alone.”

    Among the benefits: leadership recognition, increased CEO visibility and voice; privileged access to expertise and leading intelligence; UN insight; and even individualized assistance from the Global Compact’s staff.

    The nifty fifty

    So far, 54 companies have joined up. All have an existing history of engagement with the UNGC – and have committed to implement the Blueprint and share their learnings along the way. Progress will be documented in their Communications on Progress (COPs).

    To participate in LEAD, companies need to meet at least one of the following criteria:

    1. demonstrate global leadership by contributing to a UNGC issue working group, LEAD collective action initiative or working group;
    2. demonstrate local leadership by engaging with the steering committees, working groups and network events of UNGC local networks, especially in non-OECD countries; and
    3. outline their efforts to implement the Blueprint in their Communication on Progress (COP), in line with, or beyond, the Advanced level of the COP differentiation programme.

    All three criteria need to be met to continue as members after the first year. LEAD is a fee-based platform, ranging from USD10,000 to $65,000, depending on level of annual sales/revenue.

    Pilot light

    2011-2012 will be a pilot phase, during which Global Compact LEAD projects, programs and services will be refined by members, with the active involvement of other stakeholder groups.

    The creation of LEAD coincides with the launch of the Global Compact Differentiation Framework, which distinguishes between companies’ implementation of the UNGC according to size and experience, based on three levels of reporting: Basic, Intermediate, and Advanced. Tools and resources will be available for each level, with the aim of making benchmarking of sustainability performance and reporting easier.

    Plurality

    The introduction of levels and differentiation within the Global Compact is a sign of its success and maturity. Clearly those companies that really get behind the integration of the Compact and its Blueprint, deserve recognition.

    But it’s equally important that the search for recognition doesn’t become an end in itself – a sustainability badge hunt. There are plenty of highly committed companies that aren’t among the 54 LEAD members, yet who are doing great things: best practice leadership needs to be recognized in all its forms and forums. Likewise, the complexity of sustainability challenges means there isn’t a single right answer: LEAD is only one of many possible crucibles of innovation. My hunch is the future belongs more to open networks than exclusive clubs.

    Another issue for LEAD companies to consider is how effectively this forum can handle important questions that fall outside the traditional scope of the Global Compact (human and labor rights, environment and anti-corruption) and UN agencies – such as sustainable consumption and the policing of non-signatories.

    These challenges are just as deserving of highly energy efficient enlightenment.

     
  • ChristineNT 8:05 am on February 3, 2011 Permalink | Reply
    Tags: , , corporate responsibility, , , , Middle East, Revolution, , , ,   

    Will the Middle East become more responsible? 

    Is the Middle East ripe for sustainability? Corporate Knights, “the magazine for clean capitalism” just published The global 100, its take on the world’s most sustainable corporations. Not one of them is based in the Middle East, nor has there been an entry from this region since the list began in 2005.

    Unfortunately, Transparency International‘s Global Corruption Report 2009 paints a dire picture for the MENA region: “Corruption is prevalent and widespread in the MENA countries… it is deeply rooted in the political infrastructure of the state (mainly military dictatorships, totalitarian regimes or monarchies); the institutional infrastructure of the public … and develops as a result of the relatively limited opportunities for public participation. Several other factors that contribute to providing opportunities for corruption and encourage limited transparency in the region include regional and/or national insecurities, the prevalence of conflict and heavy dependence on oil revenues.” Yet we’d like to believe there is a chance that this will soon change.

    Monumental are the demonstrations in Northern Africa where people are expressing their discontent with the way things are. They are demanding a change of leadership—one that will respect human rights, freedom of speech and improve living conditions for all, not just a few. Beginning in Tunisia, the so-called Tunisia effect has inspired similar demonstrations in Algeria, Morocco, Jordan, Lebanon, Yemen and now Egypt where there is real potential for dramatic change.

    For the moment, sustainability, let alone corporate responsibility, is not top of mind as fed-up citizens fill Cairo’s Tahir Square in support of a more sustainable social system based on freedom and an end to corruption. Might a more transparent and responsible government allow for more transparent and responsible business too? At a minimum, more attention to this matter? Northern Africa’s hot and dry climate make it particularly vulnerable to climate change.

    There is hope. A new survey of the region’s corporations by the Sustainability Advisory Group, suggests that although sustainability reporting has a long way to go (too many of the business leaders they surveyed did not see climate change, water conservation and waste as important to their business) strides are being made. More companies are recognizing the benefits of corporate responsibility. To assist them there are organizations like Carboun an advocacy initiative promoting sustainability and environmental protection in the Middle East and SBAan international NGO active in the promotion of sustainable and environmental action in the Arab and West African countries. This and the promise of new leadership make this area ripe indeed.

     
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