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Global Compact International Yearbook 2012

Schwerpunktthemen der diesjährigen Ausgabe sind der Rio+20 Summit, Strategic Philantrophy und CSR in Lateinamerika sowie ein ausführliches Dossier zum komplexen Themenfeld Corporate Foresight. Mit Beiträgen u.a. von Georg Kell, Kyle Peterson (FSG), Jerome Glenn (Millennium Project) sowie Achim Steiner (UNEP). Außerdem veranschaulichen best practice Beispiele von 42 Unternehmen aus verschiedensten Teilen der Welt die Integration der zehn Prinzipien des Global Compact in das jeweilige Unternehmensumfeld. 196 Seiten, FSC-zertifizierter und klimaneutraler Druck. ISBN-13:978-3-9813540-3-4

Schwerpunktthemen der diesjährigen Ausgabe sind der Rio+20 Summit, Strategic Philantrophy und CSR in Lateinamerika sowie ein ausführliches Dossier zum komplexen Themenfeld Corporate Foresight. Mit Beiträgen u.a. von Georg Kell, Kyle Peterson (FSG), Jerome Glenn (Millennium Project) sowie Achim Steiner (UNEP). Außerdem veranschaulichen best practice Beispiele von 42 Unternehmen aus verschiedensten Teilen der Welt die Integration der zehn Prinzipien des Global Compact in das jeweilige Unternehmensumfeld.
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<strong>Global</strong> <strong>Compact</strong><br />

<strong>International</strong> <strong>Yearbook</strong><br />

<strong>2012</strong>


GC <strong>International</strong> <strong>Yearbook</strong><br />

Foreword<br />

This publication is kindly supported by:<br />

Adecco Group<br />

Air France-KLM<br />

Arab African <strong>International</strong> Bank<br />

Banco León<br />

Bayer<br />

Bosch<br />

Bradesco<br />

BSH Bosch und Siemens Hausgeräte<br />

Camposol<br />

Carrefour<br />

Consolidated Contractors Company<br />

Copeinca<br />

Deutsche Telekom<br />

EDF Group<br />

Essent<br />

Furnas<br />

Guangxi Beihai Penshibao<br />

Green Delta Insurance<br />

Groupe SEB<br />

Interamerican<br />

ManpowerGroup<br />

Medcom<br />

Metso<br />

Mitsui<br />

MTN<br />

Nestlé<br />

Netafim<br />

Novo Nordisk<br />

Rogers<br />

Royal Bank of Scotland Group<br />

SK Telecom<br />

Teck<br />

The TMS Group<br />

Tristar<br />

TÜV Rheinland<br />

Vestas<br />

Yüksel<br />

<strong>Global</strong> Logistics Partner:<br />

Deutsche Post DHL<br />

H.E. Ban Ki-moon, UN Secretary-General<br />

“<br />

As the UN <strong>Global</strong> <strong>Compact</strong> enters its 13th year, the<br />

corporate sustainability movement continues to<br />

make great strides. A growing number of business leaders<br />

understand the case for greater sustainability. They<br />

know that responsible business and long-term success are<br />

two sides of the same coin. Many of the <strong>Global</strong> <strong>Compact</strong>’s<br />

7,000 companies are proving that what is good for the<br />

environment and societies is also good for business.<br />

This is especially important in the year of the UN Conference<br />

on Sustainable Development. The Rio+20 process<br />

has shown that businesses stand ready to do their part<br />

to realize sustainable development for all. Many are not<br />

waiting for governments to act – they are moving ahead<br />

through innovation, smart investments and collaboration.<br />

From energy to decent jobs to gender equality, I am<br />

convinced that strong partnerships with the private sector<br />

are crucial to achieving our common goals.<br />

This fourth edition of the <strong>Global</strong> <strong>Compact</strong> <strong>International</strong><br />

<strong>Yearbook</strong> showcases many inspiring examples of businesses<br />

turning challenges into opportunity, leveraging their<br />

competencies, capacities and resources for the common<br />

good. I hope these diverse expressions of support for the<br />

UN’s global mission will inspire many more businesses<br />

”<br />

to follow this path and bring corporate sustainability<br />

to true scale.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> 3


BEST PRACTICE<br />

FOREWORD<br />

3<br />

H.E. Ban Ki-moon,<br />

United Nations<br />

Secretary-General<br />

74<br />

76<br />

78<br />

80<br />

Human Rights<br />

Adecco Group<br />

Banco León<br />

EDF Group<br />

Groupe SEB<br />

6Rio+20<br />

82<br />

Interamerican<br />

84<br />

Medcom<br />

86<br />

Mitsui<br />

88<br />

Novo Nordisk<br />

90<br />

Sakhalin Energy<br />

Rio+20<br />

6<br />

10<br />

13<br />

14<br />

16<br />

22<br />

23<br />

Strategic Philanthropy<br />

26<br />

The Road to Rio <strong>2012</strong> –<br />

Results and Observations from<br />

the Official and Civil Society<br />

Preparatory Processes<br />

Felix Dodds<br />

The History of Sustainable<br />

Development in the United<br />

Nations<br />

The Rio+20 Topics<br />

Judith Bomholt<br />

A Future We Want? Lessons of<br />

Rio+20<br />

Dr. Elmer Lenzen<br />

Expectations<br />

Georg Kell, Achim Steiner,<br />

Andrei Galaev,<br />

Douglas Tompkins, and<br />

Maurice F. Strong<br />

Rio+20 Corporate Sustainability<br />

Forum: Commitments and<br />

Innovations<br />

Follow-up to Rio+20: Capacity-<br />

Building with New CSR Manager<br />

Platform<br />

Dr. Elmer Lenzen<br />

From Corporate Handouts to<br />

Corporate Partnerships<br />

Veronica Scheubel<br />

32<br />

36<br />

From Competitive Advantage<br />

of Corporate Philanthropy to<br />

Shared Value<br />

Kyle Peterson<br />

A <strong>Global</strong> Shift Toward Strategic<br />

Philanthropy<br />

Punleuk Kam and Julia Yue<br />

40<br />

40<br />

44<br />

CSR in Latin America<br />

Corporate Giving Has Become<br />

Increasingly Focused<br />

Interview with Charles<br />

Moore<br />

Philanthropic Societies<br />

Around the World<br />

Compilation: Karen Rieckmann<br />

26<br />

Strategic Philanthropy<br />

CSR in Latin America<br />

44<br />

50<br />

54<br />

58<br />

62<br />

66<br />

CSR in Latin America:<br />

A General View<br />

Estrella Peinado-Vara<br />

An Evolving CSR System<br />

in Latin America<br />

Prof. Paul Alexander Haslam<br />

Should Poverty Alleviation Be<br />

Part of Multinationals’ Corporate<br />

Responsibility?<br />

Dr. Lourdes Casanova and<br />

Anne Dumas<br />

Social Responsibility Networks<br />

in the Banana Industry<br />

Prof. Dr. Maria Alejandra<br />

Gonzalez-Perez<br />

Corporate Complicity in<br />

Human Rights Abuses in<br />

Latin America<br />

Dr. Marcelo Saguier<br />

The Importance of Protecting the<br />

Rainforest in South America<br />

Dennis Lohmann<br />

68<br />

Corporate Foresight<br />

170<br />

177<br />

182<br />

187<br />

The UN <strong>Global</strong> <strong>Compact</strong><br />

in Latin America –<br />

Trends and Topics<br />

Compilation: Dr. Elmer Lenzen<br />

Corporate Foresight:<br />

An Introduction<br />

Cornelia Daheim, Holger<br />

Glockner, Klaus Burmeister,<br />

and Andreas Neef<br />

The Millennium Project<br />

Experience<br />

Jerome C. Glenn<br />

The Role of Corporate<br />

Foresight in Promoting<br />

Sustainability<br />

Prof. Dr. René Rohrbeck<br />

and Pernille Kallehave<br />

Strategic Foresight:<br />

Effective Decision-<br />

Support Systems<br />

Dr. Adrian W. Müller and<br />

Prof. Dr. Günter<br />

Müller-Stewens<br />

94<br />

96<br />

98<br />

100<br />

102<br />

106<br />

108<br />

112<br />

114<br />

116<br />

118<br />

120<br />

122<br />

124<br />

128<br />

130<br />

132<br />

136<br />

137<br />

138<br />

142<br />

144<br />

148<br />

150<br />

152<br />

154<br />

156<br />

158<br />

160<br />

162<br />

164<br />

SK Telecom<br />

Teck<br />

Tristar<br />

Labour Standards<br />

Bosch<br />

ManpowerGroup<br />

Environment<br />

Air France-KLM<br />

BASF<br />

Bayer<br />

BSH Bosch und Siemens Hausgeräte<br />

Consolidated Contractors Company<br />

Deutsche Telekom<br />

Essent<br />

Guangxi Beihai Penshibao<br />

MAN<br />

Metso<br />

MTN<br />

Vestas<br />

Development<br />

Camposol<br />

Copeinca<br />

Deutsche Post DHL<br />

Furnas<br />

GDF Suez<br />

Nestlé<br />

Netafim<br />

Rogers<br />

TÜV Rheinland<br />

CSR Management<br />

Carrefour<br />

The TMS Group<br />

Yüksel<br />

Financial Markets<br />

Arab African <strong>International</strong> Bank<br />

Bradesco<br />

166<br />

Green Delta Insurance<br />

168<br />

Royal Bank of Scotland Group


Agenda Rio + 20<br />

The Road to Rio <strong>2012</strong> –<br />

Results and Observations<br />

from the Official and<br />

Civil Society Preparatory<br />

Processes<br />

6 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

7


Agenda Rio + 20<br />

By Felix Dodds<br />

Stakeholders have been working on Rio+20 since the Group<br />

of 77 developing countries tabled the original resolution for<br />

the summit on November 4, 2008. To help in that process, the<br />

Stakeholder Forum launched the www.earthsummit<strong>2012</strong>.org<br />

website on January 1, 2009.<br />

Left: 64th Annual UN DPI/NGO Conference Bonn,<br />

Germany, September 3–5, 2011<br />

Right: Secretary-General Ban Ki-moon addresses World<br />

Food Programme event in Davos, January 2011<br />

Originally, Rio+20 suffered from being agreed to only 10 days<br />

after the Copenhagen Climate Conference had finished. As<br />

such, the mood of governments was less than positive. They<br />

did not originally allocate the appropriate number of days<br />

to address the two major themes: the green economy in the<br />

context of sustainable development and poverty eradication;<br />

and an institutional framework for sustainable development.<br />

At this time, the summit process now equals the number of<br />

days of negotiations that were available for the World Summit<br />

on Sustainable Development in 2002 – 43 days, up from the<br />

11 days originally agreed to.<br />

Rio+20 has brought back together the sustainable development<br />

family, which had dissipated in other processes since<br />

the World Summit. It also represents a chance to address<br />

the critical drivers that are creating an unsustainable world<br />

through the present economic system. Rio+20 must ensure<br />

we take a different economic path. And while the term “green<br />

economy” has become controversial in some circles, it at last<br />

puts economic affairs on the table. I believe we should see it<br />

as a transition that puts sustainability and people – as well<br />

as equity and fairness – at its core.<br />

There are clear parallels between the ecological and financial<br />

crises. Banks and financial institutions privatized gains and<br />

socialized losses. We are doing the same with the planet’s<br />

natural capital. Our present lifestyles are drawing it down at<br />

irreplaceable rates from other parts of the world and from<br />

future generations.<br />

The summit has operated through a number of preparatory,<br />

informal, and inter-sessional meetings as well as government-,<br />

UN-, or stakeholder-sponsored meetings. These have brought<br />

together the views of governments, intergovernmental bodies,<br />

and stakeholders. Stakeholder engagement has been through<br />

a number of mechanisms, predominately what is called the<br />

Major Group Organizing Partners. These represent the nine<br />

stakeholder groups that Agenda 21 identified as vital in working<br />

toward a more sustainable society.<br />

The major stakeholder event was the 64th United Nations<br />

Department of Public Information Non-Governmental Organizations<br />

Conference held in Bonn in September 2011 with<br />

over 1,500 stakeholders attending the three-day event with<br />

all major UN bodies and key governments. It came out with a<br />

Chair’s declaration, which identified that key outcomes from<br />

the summit should include:<br />

• Sustainable development goals<br />

• Reform of sustainable development and environmental<br />

governance structures in the UN<br />

• A convention on Principle 10 of the Rio Declaration – access<br />

to information, public participation, and environmental<br />

justice<br />

• A convention on corporate social responsibility and accountability<br />

• New economic indices to replace GDP<br />

• Support for the means of implementation to achieve more<br />

sustainable societies<br />

• The identification of – or the role of – volunteer action to<br />

deliver sustainability at the local level<br />

Throughout the preparatory process, a joint project of the UN<br />

Department of Economic and Social Affairs and the Stakeholder<br />

Forum has ensured the training of more than 2,500<br />

stakeholders to help them engage in the summit process. This<br />

summit process was the first to accept stakeholder inputs<br />

in what became known as the zero draft. More than 493<br />

stakeholder organizations sent their contributions, with 100<br />

governments contributing to meet the deadline of November<br />

1, 2011. The Top 10 terms (with the number of submissions<br />

in parenthesis) are:<br />

1| Health / Well-being (448)<br />

2| Poverty Alleviation / Poverty Reduction<br />

3| Natural Resources / Resource Management (318)<br />

4| Adaptation (227)<br />

5| Renewable Energy (204)<br />

6| Sustainable Development Goals [SDGs] (170)<br />

7| Accountability (170)<br />

8| Subsidies (167)<br />

9| Transparency (166)<br />

Key issues that stakeholders had promoted were picked up<br />

in the zero draft negotiating text, such as <strong>Global</strong> Framework<br />

on Corporate Sustainability Reporting, the Ombudsman for<br />

Future Generations, Sustainable Development Goals, and<br />

Principle 10. As the process has moved into negotiations, a<br />

number of key coalitions have also played a significant role<br />

in the green economy, including the Green Economy Coalition<br />

and the <strong>Global</strong> Transition <strong>2012</strong>. This is also true of the<br />

Institutional Framework for Sustainable Development, to<br />

which the Sustainable Development Governance <strong>2012</strong> Coalition<br />

has contributed greatly. All of these, along with the UN<br />

<strong>Global</strong> Sustainability Panel, brought new and relevant ideas<br />

to the table for negotiators to think about.<br />

In one of the <strong>Global</strong> Transition papers, Simon Zadek suggests<br />

amending the sovereign wealth funds’ Santiago Principles<br />

to include sustainable development criteria. Amounting to<br />

$4.7 trillion, such funds could have a huge impact if targeted<br />

toward sustainable development. Encouraging the credit rating<br />

agencies to include sustainable development criteria in<br />

their ratings systems could also have a big effect on changing<br />

corporate and government activities.<br />

More recently, the World Bank held the first-ever joint meeting<br />

of finance ministers – the heads of the UN, World Bank, and<br />

IMF – to discuss the green economy and how to ensure that<br />

the economic solutions that come out of this recession are<br />

greener. This is to become an annual meeting and the World<br />

Bank has rolled out a pilot scheme for a new way of addressing<br />

natural capital in a “50 country, 50 company” initiative.<br />

Rio’s success has already been achieved, as it has raised the<br />

issue of sustainable development in the minds of governments<br />

and heads of state. The other major achievement of Rio will be<br />

putting SDGs (in areas such as water, energy, food, consumption<br />

and production, sustainable cities) onto the global agenda<br />

to frame our move toward a more fair, just, and equitable<br />

global society. We cannot afford to make the same mistakes<br />

as in the last 20 years; we must choose the harder path for<br />

the sake of future generations.<br />

UN Secretary-General Ban Ki-moon called for “revolutionary<br />

action” to achieve sustainable development in Davos in<br />

2011, warning that the past century’s heedless consumption<br />

of resources is “a global suicide pact,” with time running out<br />

to ensure an economic model for survival. He was echoing<br />

Senator Robert Kennedy’s words from 1968, words that were<br />

about another issue in another time, but that are equally<br />

relevant today about sustainable development. Senator Kennedy<br />

said: “A revolution is coming – a revolution which will<br />

be peaceful if we are wise enough; compassionate if we care<br />

enough; successful if we are fortunate enough. But a revolution<br />

is coming whether we will it or not. We can affect its<br />

character; we cannot alter its inevitability.” Let’s work for a<br />

world built on sustainable societies, responsive citizens, and<br />

accountable governments.<br />

Felix Dodds is Executive Director of the<br />

Stakeholder Forum and Chair of the 64th<br />

UN Department of Public Information<br />

Non-Governmental Organizations<br />

Conference. Felix Dodds’ latest book<br />

(together with Michael Strauss and<br />

Maurice Strong), Only One Earth: The<br />

Long Road via Rio to Sustainable<br />

Development, is now available.<br />

8 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

9


Agenda Rio + 20<br />

The History of Sustainable<br />

Development in the United<br />

Nations<br />

In 1980, the <strong>International</strong> Union for the Conservation of Natural Resources<br />

(IUCN) published the World Conservation Strategy (WCS), which provided<br />

a precursor to the concept of sustainable development. The Strategy<br />

asserted that conservation of nature cannot be achieved without development<br />

to alleviate poverty and misery for hundreds of millions of people<br />

and stressed the interdependence of conservation and development in<br />

which development depends on caring for the Earth. Unless the fertility<br />

and productivity of the planet are safeguarded, the human future is at risk.<br />

In June 1992, the first UN Conference on Environment and<br />

Development (UNCED) was held in Rio de Janeiro and adopted<br />

an agenda for environment and development in the 21st<br />

Century. Agenda 21: A Programme of Action for Sustainable<br />

Development contains the Rio Declaration on Environment<br />

and Development, which recognizes each nation’s right to<br />

pursue social and economic progress and assigned to States<br />

the responsibility of adopting a model of sustainable development;<br />

and, the Statement of Forest Principles. Agreements<br />

were also reached on the Convention on Biological Diversity<br />

and the Framework Convention on Climate Change. UNCED<br />

for the first time mobilized the Major Groups and legitimized<br />

their participation in the sustainable development process.<br />

This participation has remained a constant until today. For<br />

the first time also, the lifestyle of the current civilization was<br />

addressed in Principle 8 of the Rio Declaration. The urgency<br />

of a deep change in consumption and production patterns<br />

was expressly and broadly acknowledged by State leaders.<br />

Agenda 21 further reaffirmed that sustainable development<br />

was delimited by the integration of the economic, social,<br />

and environmental pillars. The spirit of the conference was<br />

captured by the expression “Harmony with Nature,” brought<br />

into the fore with the first principle of the Rio Declaration:<br />

“Human beings are at the centre of concerns for sustainable<br />

development. They are entitled to a healthy and productive<br />

life in harmony with nature.”<br />

1980<br />

1992<br />

1972<br />

1982<br />

1983<br />

1993<br />

In 1972, the United Nations Conference on the Human Environment held in<br />

Stockholm brought the industrialized and developing nations together to delineate<br />

the “rights” of the human family to a healthy and productive environment.<br />

A series of such meetings followed, for example on the rights of people to<br />

adequate food, to sound housing, to safe water, to access to means of family<br />

planning. The recognition to revitalize humanity’s connection with Nature led<br />

to the creation of global institutions within the UN system.<br />

Ten years later, at the 48th<br />

plenary of the General Assembly<br />

in 1982, the WCS<br />

initiative culminated with<br />

the approval of the World<br />

Charter for Nature. The<br />

Charter stated that “mankind<br />

is a part of nature and<br />

life depends on the uninterrupted<br />

functioning of natural<br />

systems.”<br />

In 1983, the World Commission on Environment<br />

and Development (WCED) was<br />

created and, by 1984, it was constituted<br />

as an independent body by the United Nations<br />

General Assembly. WCED was asked<br />

to formulate “A global agenda for change.”<br />

In 1987, in its report Our Common Future,<br />

the WCED advanced the understanding of<br />

global interdependence and the relationship<br />

between economics and the environment<br />

previously introduced by the WCS. The report<br />

wove together social, economic, cultural and<br />

environmental issues and global solutions.<br />

It reaffirmed that “the environment does<br />

not exist as a sphere separate from human<br />

actions, ambitions, and needs, and therefore<br />

it should not be considered in isolation from<br />

human concerns. The environment is where<br />

we all live; and development is what we all<br />

do in attempting to improve our lot within<br />

that abode. The two are inseparable.”<br />

In 1993, UNCED instituted<br />

the Commission on Sustainable<br />

Development (CSD) to<br />

follow up on the implementation<br />

of Agenda 21.<br />

10<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> 11


Agenda Rio + 20<br />

The Rio+20 Topics<br />

By Judith Bomholt<br />

In 2002, ten years after the Rio Declaration, a follow-up conference, the World<br />

Summit on Sustainable Development (WSSD), was convened in Johannesburg<br />

to renew the global commitment to sustainable development. The conference<br />

agreed on the Johannesburg Plan of Implementation (JPOI) and further tasked<br />

the CSD to follow-up on the implementation of sustainable development.<br />

In June 1997, the General Assembly<br />

dedicated its 19th Special Session<br />

(UNGASS-19) to design a “Programme<br />

for the Further Implementation of<br />

Agenda 21.”<br />

2002<br />

1997 2009<br />

<strong>2012</strong><br />

On December 24, 2009, the UN General Assembly adopted a<br />

Resolution (A/RES/64/236) agreeing to hold the United Nations<br />

Conference on Sustainable Development (UNCSD) in <strong>2012</strong> – also<br />

referred to as “Rio+20” or “Rio 20.” The Conference seeks three<br />

objectives: securing renewed political commitment to sustainable<br />

development, assessing the progress and implementation gaps in<br />

meeting already agreed commitments, and addressing new and<br />

emerging challenges. The Member States have agreed on the<br />

following two themes for the Conference: green economy within<br />

the context of sustainable development and poverty eradication,<br />

and institutional framework for sustainable development. Since<br />

UNCED, sustainable development has become part of the international<br />

lexicon. The concept has been incorporated in many UN<br />

declarations and its implementation, while complex, has been at<br />

the forefront of the world’s institutions and organizations working<br />

in the economic, social, and environmental sectors. However, they<br />

all recognize how difficult it has proven to grant the environmental<br />

pillar the same recognition enjoyed by the other two pillars, despite<br />

the many calls by scientists and civil society signaling the vulnerability<br />

and precariousness of the Earth since the 1960s.<br />

Twenty years after the first international Conference on<br />

Environment and Development was held there, the United<br />

Nations Conference on Sustainable Development (UNCSD)<br />

has again taken place in Rio de Janeiro. Over 50,000 participants<br />

took part in what is known as the Rio+20 Conference,<br />

including more than 100 world leaders and heads of<br />

government. This new conference should ensure continued<br />

political commitment to sustainable development, help<br />

to take stock of previous advances, and reveal the gaps in<br />

sustainability involvement. Beforehand, the expectations<br />

had been subdued: the Preparatory Committee held three<br />

meetings to settle organizational issues and subject matter.<br />

Secretary-General Ban Ki-moon declared in early May<br />

that the preliminary discussions were reaching a critical<br />

point. Brice Lalonde, the Executive Coordinator of the<br />

Rio+20 Conference, described the prior negotiations as<br />

“very slow and very frustrating” to a Brazilian news source.<br />

He also acknowledged, however, that many countries are<br />

preoccupied with their own acute problems or with current<br />

events such as the economic crisis or elections that<br />

require attention, and that it is difficult to create what he<br />

calls “a real international moment.”<br />

The Rio+20 summit had two areas of focus, one of which<br />

was “Green economy in the context of sustainable development<br />

and poverty eradication.” The United Nations<br />

Environmental Program (UNEP) defines a green economy<br />

as “one that results in improved human well-being and<br />

social equity, while significantly reducing environmental<br />

risks and ecological scarcities.” The green economy was<br />

already subject to much critical debate in the run-up to<br />

the conference: The Rio+20 Secretariat indicated that<br />

developing countries were worried that in the future, the<br />

wealthier nations would be able to use higher environmental<br />

standards to seal off their markets.<br />

China also mentioned the difficulties associated with the<br />

implementation of the green economy, above all for developing<br />

countries, and that such countries would require<br />

the financial support of the international community and<br />

help improving technology and capacity. Participants in the<br />

alternative People’s Summit, which took place at the same<br />

time as the Rio+20 summit, shared similar views: Behind<br />

the “green economy” concept, Latin American director for<br />

the ETC Group environmental organization Silvia Ribeiro<br />

sees further exploitation of the ecosystem and the use of<br />

hazardous technologies to manipulate natural processes<br />

in order to obtain higher profits. Advocates of the green<br />

economy include the EU, but the United States, Canada,<br />

Japan, and Korea have also been receptive to the concept.<br />

The second focus of the conference was to achieve an institutional<br />

framework for sustainable development. This<br />

included developing and strengthening the formal and<br />

informal bodies, organizations, networks, and arrangements<br />

that are a part of sustainable political decision-making and<br />

implementation, above all the UN Environmental Program<br />

(UNEP) and Commission on Sustainable Development (CSD).<br />

The Rio+20 Conference mandate called for strengthening<br />

the institutional framework for sustainable development<br />

within the UN system and suggested reinforcing the UNEP<br />

through universal membership and an increase in its financial<br />

resources. Other subjects discussed were the creation<br />

of a global environmental organization and reforming the<br />

CSD, or dissolving it altogether and replacing it with an<br />

international council for sustainable development.<br />

An important topic during the conference, and one that<br />

will continue to be cause for debate, is the search for new<br />

means of measuring prosperity. The traditional analytical<br />

instrument of gross domestic product (GDP) is being sharply<br />

criticized, since it only presents the economic dimension<br />

of prosperity. The Millennium Development Goals established<br />

in 2000, the overriding goal of which is to halve<br />

poverty by 2015, will only be valid for three more years.<br />

The focus now is on new Sustainable Development Goals,<br />

(SDGs) that comprise economic as well as environmental<br />

and social dimensions.<br />

There was also discussion of the fact that the interests of<br />

coming generations should be more firmly represented.<br />

The World Future Council (WFC) has long called for governments<br />

to include an ombudsperson for the interests of<br />

future generations. One example of this is Hungary, which<br />

since 2008 has had various Ombudspersons for the Future<br />

in Parliament. These have the right to raise objections to<br />

political projects, commission expert opinions, and request<br />

a look at internal documents, among other things. They<br />

may also hear complaints from citizens, municipalities,<br />

and NGOs.<br />

Source: http://www.uncsd<strong>2012</strong>.org<br />

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Agenda Rio + 20<br />

to present a strong political message at the Rio+20 summit.<br />

Dzulkifli Abdul Razak, Vice-Chancellor of the Universiti Sains<br />

Malaysia demands that “the notion of sustainable development<br />

must be remodeled and expanded beyond development issues.”<br />

What is in the outcome document<br />

of Rio+20?<br />

A Future We Want?<br />

Lessons of Rio+20<br />

By Dr. Elmer Lenzen<br />

It was the absence of disputes that probably provoked the<br />

biggest dispute: The United Nations Conference on Sustainable<br />

Development (Rio+20 summit) ended with a concordant<br />

final resolution of 190 participating countries. The outcome<br />

document, titled “The Future We Want,” had already been<br />

published and enacted by the beginning of the conference,<br />

which led to controversies and the disappointment of many<br />

– mainly nongovernmental – participants. However, UN<br />

Secretary-General Ban Ki-moon called the summit a success:<br />

“Rio+20 has given us a solid platform to build on. And it has<br />

given us the tools to build with. The work starts now.”<br />

Other political participants agree. German environmental<br />

minister Peter Altmaier, for instance, said on a news channel:<br />

“It has been shown that we have a not very large but a stable<br />

base consensus. It would have been disastrous if the conference<br />

would have failed without any result.” He continued:<br />

“I am glad that we have managed to raise awareness for the<br />

environment step by step.”<br />

Do we want growth at any cost?<br />

Other observers were less optimistic. They warn there is a<br />

risk that instead of the future we want, we will go back to<br />

the past we had. “The ‘grow now, clean up later’ mantra is<br />

no longer viable,” says Connie Hedegaard, the EU Commissioner<br />

for Climate Action. “The result is light-years away from<br />

what the earth and humans need,” adds Alois Vedder, who<br />

participated on behalf of the WWF. It appears that presently<br />

at the UN level, no more is possible. In particular, the EU has<br />

lost ground in international negotiations and has to refocus<br />

its strategy in a changing global power structure, argues<br />

Vedder. Europeans created some positive momentum in the<br />

preliminary negotiations on topics like protecting the oceans,<br />

reducing environmentally harmful subsidies, and addressing<br />

sustainable development goals. But in the outcome document,<br />

very little of the momentum remains.<br />

“The decline is also due to a lack of credibility,” according to<br />

the WWF’s analysis. As long as sustainability remains mere<br />

lip service – while European agrarian and fisheries policy<br />

creates the opposite – Europeans will not be taken serious<br />

on the international level in their call for a green economy.<br />

This comes along with the growing capacity and self-confidence<br />

of some developing countries. Take India: In the run-up to<br />

Rio+20, The Energy and Resources Institute of India (TERI) called<br />

for a framework rather than a “set of rigid rules.” The Hindu<br />

newspaper explains: “A TERI background paper on ‘India’s<br />

Green Economy: The Roadmap to an Inclusive and Equitable<br />

Growth’ says the challenges and priorities for developing<br />

countries like India are different from the developed world.<br />

It, therefore, calls upon the Rio+20 summit to contribute to<br />

meeting the key goals of developing countries, particularly<br />

poverty eradication, food security,” among other things.<br />

The litigious environmental and social activist Sunita Narain<br />

argues: “It seems world leaders, lost in managing the financial<br />

crisis, have no time for environmental issues. It seems the world<br />

has run out of ideas to safeguard a common future.” Indeed<br />

the global conditions with national insolvencies, crises of democracy,<br />

and global mass unemployment made it unrealistic<br />

A model for a 21st century multilateralism?<br />

UN Secretary-General Ban Ki-moon also sees this context.<br />

In an article for the Singapore-based New Straits Times, he<br />

wrote: “At Rio, we must begin to create a new one (model) – a<br />

model for a 21st century economy that rejects the myth that<br />

there must be a zero sum trade-off between growth and the<br />

environment.” So, what was the message Rio sent? Those who<br />

expected concrete action or even financial promises have been<br />

disappointed. To evaluate the success of the Rio+20 summit<br />

merely on its outcome sets the wrong focus.<br />

Two decades ago at Rio 1992, the conflict lines were between<br />

the rich North and the developing South. Today it is between<br />

the traditional global players like Europe and the United<br />

States, who find themselves weakened by internal crises, and<br />

the aspiring new global players like Brazil, India, and above<br />

all China, who are struggling for new power constellations<br />

and an adjustment of the global order. We already saw this<br />

trend at the Copenhagen Summit and during the ISO 26000<br />

process. At Rio <strong>2012</strong> it became apparent that the fight was<br />

about whose goals would be on the priority list.<br />

Walk the talk<br />

Therefore, the momentum generated by Rio+20 is less about<br />

concrete political commitments and more about the narratives<br />

it created. In retrospect, the Rio+20 summit was a platform for<br />

knowledge-exchange rather than for negotiations. Here, “green<br />

economy” has become the new buzz-phrase in sustainability<br />

discourses. The challenge will be to supply the concept with<br />

innovative solutions and measurable instruments. A green<br />

economy – or sustainable economy, as we called it less than<br />

two years ago – must learn to consider political, economic,<br />

and cultural constraints or it will not be successful.<br />

Who can provide answers to this if not the official political<br />

summit? That was probably the most interesting to hear about,<br />

namely that results came from different corners: business and<br />

academic. Side events such as the UN <strong>Global</strong> <strong>Compact</strong> Corporate<br />

Sustainability Forum, the activities of the UN Principles for<br />

Responsible Management, and many others launched promising<br />

new concepts such as ways for better water management,<br />

alternative indicators to measure development beyond GDP,<br />

and business models that promote inclusive and green growth.<br />

Those side events sent out an encouraging signal: Decisionmakers<br />

in business and civil society have already started to<br />

reconfigure their strategies and economic concepts toward a<br />

more sustainable value creation.<br />

Green Economy: In the 50-page final declaration, the<br />

participating States committed themselves to the concept of<br />

“green economy,” which has resource-saving economics as a<br />

goal. By 2015, Sustainability Goals shall be developed. Specific<br />

indicators of prosperity beyond GDP are missing, however,<br />

according to the WWF.<br />

UN Institutions: The United Nations Environment Programme<br />

will not be upgraded to a full UN agency, but further steps<br />

in that direction have been made. The upgrading of the<br />

Commission on Sustainable Development to a global<br />

Sustainability Council with more influence has failed. Instead it<br />

was transformed into a “forum.”<br />

Millennium Development Goals: In addition, the Rio paper<br />

includes proposals for the fight against poverty, climate change,<br />

and desertification. One concrete plan is to continue the UN<br />

Millennium Development Goals, which are due to expire in 2015,<br />

with the new Sustainable Development Goals.<br />

Financing for Development: Brazil’s President, Dilma Rousseff,<br />

promised that they would focus on further financial assistance<br />

for the sustainable transformation of developing countries.<br />

These countries demanded $30 billion, which was rejected due<br />

to the financial crisis.<br />

Energy: The start of the initiative “Energy Access for All” was<br />

confirmed, but a date for when the goal has to be achieved<br />

has not been announced. Not even the expansion of renewable<br />

energies was thoroughly discussed. In the end, what “modern<br />

sustainable energies” means is left up to the individual nations<br />

to define.<br />

Water: In comparison to the Johannesburg agreement in 2002,<br />

there have been some concrete formulations for interacting<br />

with ecosystems and their role in water availability as well as<br />

new commitments for managing water. It is recognized that<br />

water is a key for ​sustainable development. The attempt to<br />

weaken the principle of shared responsibility for cross-border<br />

water ecosystems was blocked.<br />

Oceans: At the last minute, an agreement to implement a UN<br />

Convention for the protection of the high seas was canceled.<br />

WWF and many NGOs call this summit a failure because this<br />

important agreement had been a part of the outcome draft right<br />

up until it was canceled.<br />

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Agenda Rio + 20<br />

/Expectations///Expectations///Expectations///Expectations///Expectations///Expectations///<br />

Georg Kell<br />

Georg Kell,<br />

Executive Director, UN <strong>Global</strong> <strong>Compact</strong><br />

Never before in recent history has there been such widespread uncertainty<br />

about the future. Major developments are shaping our world,<br />

raising important questions about the proper role of business and the<br />

legitimacy of markets. First, while the adoption of austerity measures<br />

has been a painful adjustment for countries in many parts of the developed<br />

world, a good portion of the world’s economic might and growth has gradually<br />

been shifting from Europe and the West to the East and South. At the same<br />

time, rising inequality and widening gaps between rich and poor have become<br />

global phenomena. Income gaps in OECD countries have reached the highest<br />

levels in 30 years and are even more pronounced in many emerging economies.<br />

As a result of rapidly eroding trust in markets, institutions, and leadership,<br />

citizens are demanding more equality, freedoms, and accountability. Popular<br />

protests – from Wall Street to Moscow – are expressions of global discontent<br />

that cuts across economic, social, and political spheres. And continued stress<br />

on natural resources threatens to disrupt economies and societies around the<br />

planet. More than one billion people lack access to food, electricity, or safe<br />

drinking water. Climate change remains a critical issue, and ecosystems are<br />

in dramatic decline.<br />

Many argue that business is at the heart of many of these problems. But this<br />

sweeping indictment fails to see the potential of business, if properly channeled,<br />

to produce many of the solutions needed to drive positive and transformative<br />

change. The good news is that thousands of companies already incorporate<br />

environmental and social issues into their agendas. The UN <strong>Global</strong> <strong>Compact</strong><br />

alone counts nearly 7,000 corporate signatories in 150 countries driving<br />

innovation in areas as diverse as energy and climate change, women’s empowerment,<br />

and anti-corruption.<br />

However, most companies simply are not doing enough. Sustainability as a<br />

value proposition has not yet gained global acceptance. With an estimated<br />

80,000 multinationals and millions of smaller enterprises, much remains to<br />

be done. This June’s UN Conference on Sustainable Development, commonly<br />

known as Rio+20, is a unique chance to move the corporate sustainability<br />

agenda to a global scale, but it will require government and business to deliver<br />

on a variety of critical fronts:<br />

Corporate governance – at the Board level – must recognize environmental and<br />

social issues as being critical to long-term business success. Companies must<br />

strengthen their Boards’ ability to understand and oversee social components<br />

as a complement to their roles in assessing business strategy, risk management,<br />

and legal compliance. Such oversight will ensure that implementation will<br />

cascade throughout the value chain. The courage to deliver what we call a<br />

new contract between business and society will help generate and restore balance<br />

and boost growth in the marketplace. Of course, none of this can happen<br />

without strong political leadership. But as a growing number of companies<br />

embrace the sustainability challenge, political leaders will be encouraged and<br />

inspired to do their part.<br />

Businesses must also heed the call of a new generation of investors and other<br />

stakeholders and report publicly on their sustainability performance. While<br />

there is great appetite for increased disclosure, investors typically find reporting<br />

in the environmental or social realms to be insufficient. A global policy<br />

framework to disclose sustainability information in line with annual financial<br />

or other reports would go a long way in helping business to communicate more<br />

transparently on these issues – or explain why they do not.<br />

While governments are ultimately responsible for developing institutional<br />

frameworks, they cannot solve the world’s challenges alone. Transformative<br />

public-private partnerships that engage governments and society at all levels<br />

build on the relative strengths and competencies of each actor and can have<br />

lasting positive impacts on policy, market structure, and social norms.<br />

Responsible lobbying and advocacy must be supported at the highest levels.<br />

Lobbying actions often conflict with a company’s stated values and take a<br />

lowest-common- denominator approach rather than pursue long-term interests.<br />

Governments should adopt smart regulatory frameworks and incentive structures<br />

so that the dinosaurs of business are not rewarded above environmental<br />

and social performance.<br />

Goods and services that respond to the growing demand for more sustainable<br />

solutions should be encouraged and rewarded. Consumers and markets<br />

are ready for them, but incentive structures have not kept pace with shifting<br />

values and preferences.<br />

The courage to deliver what we call a new contract between business and society<br />

will help generate and restore balance and boost growth in the marketplace.<br />

Of course, none of this can happen without strong political leadership.<br />

But as a growing number of companies embrace the sustainability challenge,<br />

political leaders will be encouraged and inspired to do their part.<br />

Source: Guest article on the “Sustainable Development Policy &<br />

Practices” platform prepared for the UN Conference on Sustainable<br />

Development (UNCSD) and initiated by the <strong>International</strong> Institute for<br />

Sustainable Development (IISD).<br />

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Agenda Rio + 20<br />

/Expectations///Expectations///Expectations///Expectations///Expectations///Expectations///<br />

Andrei Galaev<br />

Achim Steiner<br />

Decisions made at global conferences have great effects on CSR and<br />

sustainable development progress and concept advancement. I believe<br />

that the Rio+20 United Nations Conference on Sustainable Development<br />

will be the next milestone in international efforts to accelerate progress<br />

toward achieving sustainable development globally. It is an opportunity for<br />

participants to honestly and openly discuss what has been achieved in the<br />

last 20 years since Agenda 21 at the Earth Summit in Rio; what the biggest<br />

challenges and issues have been; and whether governments, business, the UN<br />

system, and other parties have managed to address them effectively.<br />

Rio+20 – as the United Nations Conference on Sustainable Development<br />

has come to be known – provides an unprecedented opportunity for<br />

the world to transform the current economic paradigm into one that<br />

enhances human well-being while respecting planetary boundaries<br />

and environmental limits. This will require changes in the way we perceive<br />

progress, make financial decisions, and do business in order to ensure that<br />

social and environmental considerations are fully integrated into decisionmaking.<br />

As the driving forces of economic growth, business and industry will<br />

have a leading role to play.<br />

Many in the private sector understand this, and they are placing increasing<br />

importance on environmental, social, and governance issues. As a founding<br />

member of the <strong>Global</strong> Reporting Initiative, UNEP promotes sustainability<br />

reporting for private and public institutions along globally applicable guidelines.<br />

UNEP works in tandem with the United Nations <strong>Global</strong> <strong>Compact</strong>, the<br />

<strong>International</strong> Integrated Reporting Council, and others to help companies better<br />

understand and address their integrated environmental and social impacts.<br />

UNEP supports lifecycle-based methodologies such as resource foot-printing,<br />

science-based information on critical resource flows, and capacity enhancement<br />

in developing and emerging economies.<br />

A recent survey of sustainability experts notes that systematic pressure for<br />

financial short-termism and the lack of regulatory incentives highlight the<br />

importance of developing more enabling frameworks, which will be an item<br />

of discussion at the Rio+20 conference this year. UNEP’s Green Economy<br />

research provides ample evidence that business as usual cannot<br />

continue.<br />

Achim Steiner,<br />

Executive Director, United Nations<br />

Environmental Programme (UNEP)<br />

Andrei Galaev,<br />

CEO, Sakhalin Energy Investment<br />

Company Ltd.<br />

UN <strong>Global</strong> <strong>Compact</strong> Board Member<br />

I hope that at the Rio+20 conference, and in particular the Rio+20 Corporate<br />

Sustainability Forum, the business community will demonstrate a proactive<br />

stance and desire to move forward regarding sustainable development, sustainability<br />

leadership, and contributions to the Millennium Development Goals.<br />

The Rio+20 Corporate Sustainability Forum, under the umbrella of the UN<br />

<strong>Global</strong> <strong>Compact</strong>, is a great platform to meet business leaders, international<br />

institutions, CSR experts, as well as public and other stakeholders. As CEO of<br />

Sakhalin Energy and Chairperson of the <strong>Global</strong> <strong>Compact</strong> Network in Russia,<br />

I am proud to have the opportunity to participate in Rio+20 and contribute<br />

toward its goals: to define pathways to a safer, more equitable, cleaner, greener,<br />

and more prosperous world for all.<br />

For our part, we are open to learning opportunities and ready to share experiences.<br />

Sakhalin Energy participated in the pilot project of the UN Guiding<br />

Principles on Business and Human Rights that were developed by Professor John<br />

Ruggie and endorsed by the UN Human Rights Council last year. I sincerely<br />

share Professor Ruggie’s opinion that “the era of declaratory CSR is over; we<br />

have moved into ‘prove it.’” This can certainly be one of the key challenges.<br />

I think it is important to discuss lessons learned at Rio+20, to share best practices<br />

and proven sustainability models – especially partnership ones – and to<br />

pay special attention to practical global commitments on human rights and<br />

accountability. As a business representative and newly appointed UN <strong>Global</strong><br />

<strong>Compact</strong> board member, I see that it is critical to take new, practical, and<br />

measurable commitments on sustainability goals with clear targets, institutional<br />

frameworks, and responsibilities for sustainable development.<br />

I trust that human rights will be a core approach and core principle<br />

to these new commitments.<br />

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Agenda Rio + 20<br />

/Expectations///Expectations///Expectations///Expectations///Expectations///Expectations///<br />

Douglas Tompkins<br />

The Rio+20 conference in June <strong>2012</strong> has been generating concern<br />

and a lack of confidence on the part of many environmentalists and<br />

conservationists I know and work with.<br />

Although the first Rio conference ignited hopes for millions and was in fact<br />

an historical launching point for united government action on environmental<br />

issues, it still fell far short of expectations. Those with optimistic visions – and<br />

what I consider to be often Pollyanna characterizations of these unwieldy and<br />

multination world conferences – perhaps can see it in a positive light. One hears<br />

all the excuses that this or that was better than nothing, or that “perfection is<br />

the enemy of the good” and similar aphorisms.<br />

The point is that nature does not digest anything for its good health and normal<br />

functioning except for real-world impacts. The extinction crisis – “the mother of<br />

all crises” – is the price that the ecosphere pays for runaway overdevelopment.<br />

It is that simple. Nature operates under her own rules, indifferent to human<br />

aspirations, but the nations of the world cannot seem to grasp that simple fact.<br />

Not one individual actor will give up anything in their development game, and<br />

therein lies the tragedy of the planetary commons.<br />

Each nation, therefore, is locked into a system that compels it to increase its<br />

share of the planet without limits – on a planet whose limits are finite. Ruin<br />

is the destination toward which all nations rush, each pursuing its own best<br />

interests in a society that believes in globalization and its purported benefits.<br />

This individualism and freedom to plunder the ecosphere then brings all to ruin.<br />

Only a sea change in human consciousness might bring the world back from<br />

the edge of the abyss it finds itself on today, far more successfully than Rio+20<br />

and all its conference attendees and the press can. This is a type of “religious”<br />

and cosmo-vision change, one which requires that every person – or at least the<br />

vast majority – believes and lives by the notion that we must share the planet<br />

with other creatures. For that reason, I do not see how the Rio+20 conference<br />

– despite its good intentions – will do much at all toward achieving the<br />

goal of ending the extinction crisis. For there will be no prosperity, no<br />

social justice, no art and culture, and no economy on a dead planet.<br />

Douglas Tompkins is an American<br />

environmentalist, prominent landowner,<br />

conservationist, and a former businessman.<br />

He co-founded and ran two clothing<br />

companies: the outdoor clothing company<br />

The North Face; and with his then-wife Susie,<br />

the ESPRIT clothing company.<br />

Maurice F. Strong is a Canadian entrepreneur<br />

and a former Under-Secretary General of the<br />

United Nations.<br />

Maurice F. Strong<br />

Experience has demonstrated that those countries that have been most<br />

successful in improving their environments are those, like Japan, that<br />

have been most efficient in managing their economies and reducing<br />

the energy, resources, and materials used to generate their GDPs. Rio+20 must<br />

provide for special measures to assist developing countries in the efficiency of<br />

their economies.<br />

No issue is more important to the future of humans than that of climate change,<br />

wherein the political will to act cooperatively and decisively has diminished<br />

considerably and endangers any potential progress. Rio+20 must reinforce<br />

international efforts at Durban and beyond to reach agreement and renewal<br />

of the UN Framework Convention on Climate Change and its implementation.<br />

Paradoxically, if we fail to act, the reduction in global greenhouse gas<br />

emissions could occur through the collapse of the world economy, which none<br />

of us want. After all, the roots of the environmental and climate change crises<br />

are the same as those of the economic and financial crises – the inadequacies<br />

of our economic system.<br />

Only an enlightened view of their own self-interest in the security and sustainability<br />

of life is likely to induce the more developed countries to accept<br />

the principal responsibility they bear for the fundamental change in course<br />

that we must make. Developing countries must play their part, but their<br />

responsibilities are of a different order of magnitude. The concept of<br />

shared but differentiated responsibilities must be strongly reinforced at<br />

Rio+20.<br />

Excerpts from a statement delivered to the Special United Nations General Assembly Event on Rio+20,<br />

New York, October 25, 2011.<br />

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Agenda Rio + 20<br />

CSF – Commitments<br />

and Innovations<br />

UN Secretary-General Ban Ki-moon accepted the full set of<br />

outcomes from the Rio+20 Corporate Sustainability Forum<br />

(CSF), including a listing of more than 200 business commitments.<br />

The Forum, organized by the UN <strong>Global</strong> <strong>Compact</strong>, in<br />

cooperation with the Rio+20 Secretariat, the UN System, and<br />

the <strong>Global</strong> <strong>Compact</strong> Network Brazil, brought together 2,700<br />

business leaders, investors, academics, government officials,<br />

environmentalists, and grassroots activists.<br />

“The Corporate Sustainability Forum outcome document<br />

shows the solid commitment to sustainable development<br />

among the business community, and the creativity of their<br />

new approaches to low-carbon solutions, reducing poverty,<br />

empowering women, and restoring fresh water resources,”<br />

said Georg Kell, Executive Director of the UN <strong>Global</strong> <strong>Compact</strong>.<br />

Among the decisions taken were:<br />

An offer by business leaders to be a part of the creation and<br />

promotion of new Sustainable Development Goals. The Sustainable<br />

Development Goals concept has attracted broad support<br />

among governments negotiating the Rio+20 outcome text, as<br />

well as captured the imagination of the general public. An<br />

existing set of global objectives, the Millennium Development<br />

Goals, are mostly geared to the deadline in 2015.<br />

A communiqué signed by 45 CEOs of major corporations outlines<br />

ways that governments can do better on water management and<br />

how they can set frameworks that will help business to scale<br />

up its own role in reducing usage and restoring natural sources.<br />

Companies advancing the tenets of Corporate Water Sustainability<br />

as well as Ecosystems Management are pushing the boundaries<br />

of innovation on a number of levels. Examples include:<br />

• Developing new or enhanced technologies for water efficiency<br />

and waste-water management.<br />

• Developing water-sensitive products and providing watersensitive<br />

services.<br />

• Performing research and data analysis with respect to water.<br />

• Recognizing that water is a major gender issue.<br />

Valuing ecosystems and natural capital.<br />

Nearly 300 institutions of higher learning endorsed a plan<br />

to place sustainable development at the heart of college and<br />

university curricula. Collaborations, for example in the form<br />

of corporate-academic and multistakeholder partnerships, are<br />

taking place in a variety of ways and give practical meaning<br />

to the fifth and sixth Principles for Responsible Management<br />

Education (PRME) on partnership and dialogue, respectively.<br />

Notable examples involve the close collaboration between the<br />

PRME and the UN <strong>Global</strong> <strong>Compact</strong> and include:<br />

• Faculty engaged in the PRME Working Group on Anti-Corruption.<br />

• Efforts are planned for fall <strong>2012</strong> to raise greater awareness<br />

about human rights principles as well as to bring the issue<br />

of corporate responsibility for respecting human rights to<br />

business school audiences.<br />

• Some PRME signatory schools have collaborated closely with<br />

<strong>Global</strong> <strong>Compact</strong> Local Networks by holding conferences and<br />

workshops, providing capacity such as hosting the Network’s<br />

secretariat, and developing and providing training on corporate<br />

sustainability.<br />

• Joint projects between PRME and <strong>Global</strong> <strong>Compact</strong> LEAD<br />

include providing analytical support and capacitybuilding<br />

efforts such as developing a board of education<br />

program.<br />

Follow-up to Rio+20:<br />

Capacity-Building with<br />

new CSR Manager<br />

Platform<br />

By Dr. Elmer Lenzen<br />

CSR-Manager.org is the new, advanced web presence of the renowned<br />

United Nations <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong>.<br />

The aim of the website and the yearbook is to create a global<br />

overview of achievements in corporate social responsibility<br />

(CSR) and to build up capacity for more comprehensive and<br />

sustainable management of these activities. Both the yearbook<br />

and the website offer proactive and in-depth information on<br />

key sustainability issues to stakeholders around the world, and<br />

each promotes unique and comprehensive knowledge-exchange<br />

and learning in the spirit of the UN <strong>Global</strong> <strong>Compact</strong> Principles.<br />

These two international media outlets help to advance transparency<br />

and promote the sharing of best practices. Perhaps most<br />

significantly, they give a strong voice to the regional and global<br />

CSR actors that are at the heart of sustainable development.<br />

22 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

23


Agenda Rio + 20<br />

Since its launch in 2000, the United Nations <strong>Global</strong> <strong>Compact</strong><br />

has emerged as one of the world’s most influential platforms<br />

for corporate responsibility. Its structure as a global network<br />

presents a unique opportunity to take a closer look at both<br />

global and regional developments and interpretations of<br />

corporate social responsibility.<br />

In order to highlight some of the important issues that the<br />

<strong>Global</strong> <strong>Compact</strong> seeks to address and to showcase good practices<br />

by <strong>Compact</strong> participants, the macondo Media Group and<br />

the <strong>Global</strong> <strong>Compact</strong> Office formed a successful partnership in<br />

2009 to produce the <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong>.<br />

The CSR-Manager.org website expands on these activities for<br />

<strong>2012</strong>, offering unique and tailored content. CSR-Manager.org<br />

focuses explicitly on capacity-building and provides a blueprint<br />

for corporate responsibility.<br />

Approach<br />

Corporate social responsibility has become an essential part<br />

of doing business. These days most large companies want to<br />

do the right thing on issues such as respecting human rights,<br />

protecting natural resources, preserving labor standards, protecting<br />

the environment, and fighting corruption.<br />

At the same time, however, the approach to such topics could<br />

have a more wide-ranging impact. Small and mid-sized companies<br />

frequently feel overwhelmed when it comes to the<br />

subject of CSR, or just left out in the cold. Many of them are<br />

already taking a great deal of responsibility, but they lack a<br />

workable strategy. They need a place where they can share<br />

their experiences with CSR activities and gain management<br />

know-how.<br />

There is broad agreement among all actors in the CSR sphere<br />

that better incentive structures are needed, incentive structures<br />

that will allow firms of various ages and sizes to get involved.<br />

Important adaptation measures have been put into practice<br />

so far: LEAD, for example, under the leadership of the United<br />

Nations <strong>Global</strong> <strong>Compact</strong>, is setting the goalposts for the CSR<br />

movement even further forward. Partnerships between the<br />

UN <strong>Global</strong> <strong>Compact</strong> and the GRI; initiatives like the PRI and<br />

the CDP; and political CSR recommendations such as those<br />

of the European Commission are bringing existing instruments<br />

closer together to create a greater level of coverage.<br />

But it is sometimes difficult for beginners to find their way<br />

around these structures.<br />

While the sustainability movement has made great strides in<br />

recent years, significant challenges still remain, as UN <strong>Global</strong><br />

<strong>Compact</strong> Executive Director Georg Kell has noted. If we are<br />

to establish corporate social responsibility on a larger scale,<br />

we must stimulate collective action, bring CSR stakeholders<br />

together, and help smaller companies close gaps in performance.<br />

Solution<br />

This is where CSR-Manager.org comes in. This new online<br />

resource is a blueprint for corporate sustainability management,<br />

a rich database for shared learning. At CSR-Manager.<br />

org, companies will find the tools and training to integrate<br />

CSR in the way that is right for them.<br />

Together with its partners, CSR-Manager.org offers a platform<br />

to help firms meet regulations, manage CSR strategies, and<br />

develop their companies strategically. It is also dedicated<br />

to non-business stakeholders and includes their expertise,<br />

opinions, and projects.<br />

By bringing these different actors together, the CSR-Manager.<br />

org network acts as a virtual bridge between experts and<br />

beginners, creating a platform for knowledge and dialogue.<br />

The site makes the shared learning approach of the UN <strong>Global</strong><br />

<strong>Compact</strong> accessible to small and mid-sized companies as part<br />

of the course of doing business. Bringing together experts from<br />

the academic and business worlds, as well as civil society, the<br />

site gives new meaning to the concept of “common growth”<br />

as an ideal platform for new and continuing education in<br />

sustainable economic activity.<br />

The website also serves as a space where those in charge of<br />

CSR can themselves reflect on it. These days, participants who<br />

concentrate on day-to-day business can end up falling further<br />

and further behind on economic, environmental, and social<br />

challenges. They need a way to manage the signal and information<br />

overload from news, e-mail, social networks, meetings,<br />

and teleconferences. Time to reflect is valuable – and good<br />

advice is more expensive than ever. With specialized editors<br />

who preselect content, and internationally recognized experts<br />

as part of the site, CSR-Manager.org offers information that is<br />

exactly what CSR managers need.<br />

Capacity-Building<br />

The online features at CSR-Manager.org provide a diverse<br />

array of instruments for capacity-building. We offer specialized<br />

occupational continuing education and training<br />

designed to be used in the field, as well as dialogue and<br />

networking opportunities and E-Learning courses. Designed<br />

to inspire advanced performers to reach the next level of<br />

sustainability, CSR-Manager.org sets targets that all companies<br />

can work toward in order to ascend the learning and<br />

performance curve.<br />

Knowledge-transfer<br />

Development requires change. CSR-Manager.org provides<br />

networking and training opportunities for experts, leaders,<br />

and decision-makers in business, politics, and civil society<br />

worldwide.<br />

Continuing education and training<br />

CSR-Manager.org offers sector-specific and practical programs<br />

for experts and leaders working around the world.<br />

Organizing multistakeholder dialogue<br />

Change does not happen without dialogue. CSR-Manager.org<br />

hosts global political dialogues, sector-specific dialogues, and<br />

expert dialogues as appropriate for the subjects discussed and<br />

the groups of participants involved.<br />

Building networks<br />

We offer members the opportunity to expand their personal<br />

and professional contacts and interact with one another<br />

through global networking.<br />

E-Learning<br />

Learning and communicating across any border – this is<br />

the idea behind our Academy feature. CSR-Manager.org is a<br />

virtual learning platform in collaboration with well-known<br />

universities and supranational organizations.<br />

Partnerships for strategic consulting<br />

Capacity-building through strategic corporate development<br />

is how CSR-Manager.org offers programs that are a perfect fit<br />

for personnel issues and can assist with the development of<br />

appropriate management structures.<br />

Publisher<br />

macondo Media Group is the creator and publisher of CSRmanager.org.<br />

Involved with the UN <strong>Global</strong> <strong>Compact</strong> and GRI<br />

since 2002, macondo is recognized as one of the leading CSR<br />

publishing houses in the German-speaking region. macondo<br />

also publishes the <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong>.<br />

Selected authors of macondo publications include H.E. Ban<br />

Ki-moon, Bill Clinton, Georg Kell, Anthony Giddens, Achim<br />

Steiner, John Elkington, and many others.<br />

Find out more: csr-manager.org<br />

Dr. Elmer Lenzen is founder of the<br />

macondo Media Group, publishing<br />

house of the <strong>Global</strong> <strong>Compact</strong> <strong>Yearbook</strong>s<br />

and the new CSR Manager Platform.<br />

24 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

25


Agenda<br />

Strategic Philanthropy<br />

From Corporate Handouts<br />

to Corporate Partnerships<br />

26 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

27


Agenda<br />

Strategic Philanthropy<br />

Philanthropy is about donating to charity without expecting a return. Companies have<br />

historically contributed to society in this way. Strategic philanthropy, which is a more<br />

modern approach, is about directing corporate giving to a cause that is aligned with the<br />

core business. Yet in the 21st century, strategic philanthropy does not suffice in providing<br />

leadership. There is a growing demand for companies to move beyond strategic philanthropy<br />

to modern community partnerships, co-creating solutions to pressing societal and<br />

environmental problems by contributing core competencies and truly aiming for impact. In<br />

the process, shared value creation for both society and the company is not only desirable for<br />

companies, but also to stakeholders.<br />

By Veronica Scheubel<br />

The term philanthropy can be traced to ancient Greek (“to<br />

love people”). In the context of what companies usually do,<br />

this may seem a little incongruous. It involves the giving of<br />

money, goods, services, time, and/or effort to support a socially<br />

beneficial cause, with no (or little) reward for the donor.<br />

Corporate philanthropy is often also called corporate giving.<br />

Corporate donations are about “the writing of checks to charity.”<br />

Companies donate some of their profits, or their resources,<br />

to nonprofit organizations. Giving is often handled by the<br />

company directly, or it may be done through a corporate<br />

foundation. Typical causes supported include artistic, religious,<br />

sports, charitable, and humanitarian causes as well as support<br />

for educational institutions. Local donations especially tend<br />

to go “all over the place” – to schools and kindergartens,<br />

theaters and museums, hospitals and orphanages, the local<br />

fire brigade and the local swimming pool. This is called “unstructured<br />

giving.”<br />

History of corporate philanthropy<br />

To understand the history of corporate giving, it is helpful to<br />

think back to the roles of some companies in 19th century<br />

industrialized society. Back then, corporate giving was often<br />

an integral part of how companies supported their employees’<br />

existence: for example, by funding their housing, setting up<br />

schools for their children, or financing a hospital for the<br />

community. Those companies understood back then what<br />

the World Business Council for Sustainable Development<br />

states in its “10 messages by which to operate”: “Business<br />

cannot succeed in societies that fail.” They understood that<br />

in order to do business effectively, they needed to contribute<br />

to the creation of local infrastructure. However, as business<br />

became more market-oriented and government’s role grew –<br />

especially in Western society – the motivation for corporate<br />

giving changed.<br />

Sometimes it was cut almost completely; other times it was<br />

sidelined to an obscure part of the organization. More commonly,<br />

it was (and often still is) not “managed” at all. Sometimes,<br />

a company’s giving interests simply depended on what<br />

causes or charities the CEO’s spouse wanted to see supported.<br />

Giving money is still an important element of how a company<br />

supports the communities in which it operates – but it is just<br />

the beginning. Sometimes it may be in the company’s interest<br />

to support an issue or cause that is not aligned to the business<br />

– for example, when a particular cause is very important to a<br />

local stakeholder whose support is needed. We also see small<br />

companies in villages donating to local community causes in<br />

order to maintain good, long-term relations with their customers<br />

and out of a sense of responsibility as “corporate citizens.”<br />

For any sizeable company, however, it is advisable to keep<br />

the sums that are going into unstructured corporate giving<br />

relatively small. Any company can make its donations even<br />

more effective by aligning them to its business. This is called<br />

“strategic” philanthropy.<br />

More focus: Strategic philanthropy<br />

Given that companies also look for a return – usually a reputation<br />

benefit – for making their contributions, increasingly<br />

they are looking to focus their corporate giving. This is called<br />

strategic philanthropy. Companies have been adopting increasingly<br />

strategic approaches in their support of important causes.<br />

Through strategic philanthropy, companies seek to align their<br />

charitable giving with a cause that connects to their core business.<br />

Companies that pursue this path might say, “We only give<br />

money to hospitals,” or “only to community organizations in<br />

our region,” or “only to causes that support children’s education.”<br />

Thinking about a strategic focus for corporate giving<br />

also means considering the potential reputation value gained<br />

from a focused approach to giving. For example, it makes<br />

sense from a public recognition and credibility standpoint<br />

for a pharmaceutical company to support cancer research, as<br />

opposed to arts and culture programs.<br />

For strategic philanthropy, it is helpful to look at the company’s<br />

business strategy or, if it exists, corporate responsibility / sustainability<br />

strategy. Are there some specific themes that could also<br />

be followed in the company’s giving? For example, the majority<br />

of Avons’ customers and employees are women. It therefore<br />

makes sense for the company to be actively involved in charitable<br />

initiatives around breast cancer and against domestic violence.<br />

Beyond strategic philanthropy: Why “just giving” is no<br />

longer enough<br />

By the late 1990s, it had become clear that national governments<br />

were increasingly losing power and influence. Civil<br />

society started to assume a more important role. Stakeholders<br />

became increasingly aware and – in light of societal and<br />

environmental issues – demanded both transparency and<br />

collaborative contributions from companies. In 2000, a report<br />

on the top 200 corporations by the Institute for Policy Studies<br />

established that of the top 100 financial entities in the world,<br />

51 were companies, and only 49 were nation states. In this<br />

context, companies are seen as having a growing role in helping<br />

to solve social challenges related to employment, health,<br />

safety, education, culture, and the environment.<br />

A new role for corporations: Modern community<br />

partnerships<br />

This new role for business asks companies to think together<br />

with governments and NGOs on a higher level about finding<br />

and co-creating solutions to pressing problems – and then to<br />

apply those solutions together in local contexts. This new thinking<br />

represents a shift in roles, emphasizing the participatory<br />

responsibility of all sectors for co-creating societal innovation<br />

and change – for collaborative impact.<br />

Clear Shift toward more<br />

strategic partnerships<br />

37%<br />

20%<br />

Doing this work together demands cross-sectoral commitments,<br />

making partnerships increasingly important. It also requires<br />

a range of collaboration and partnering skills that companies<br />

need to develop. These cross-sectoral commitments tend not<br />

to be called strategic philanthropy, but rather “corporate community<br />

involvement.” Since the beginning of the millennium,<br />

corporate community involvement has been the term most<br />

5%<br />

Zero<br />

19% – 20%<br />

21% – 50%<br />

51% – 75%<br />

More than 75% +14%<br />

18%<br />

22%<br />

Percentage of corporate NGO partnerships described as<br />

strategic (corporate respondents)<br />

57% of companies classify their partnerships as “strategic”<br />

(up 14% on prior year)<br />

Source: “The Changing Face of Corporate Partnerships,” C&E Advisory<br />

(www.candeadvisory.com/barometer), March <strong>2012</strong><br />

28 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

29


Agenda<br />

Strategic Philanthropy<br />

used for active community partnership projects between a<br />

company and/or governments and/or NGOs in the countries,<br />

regions, or communities where a company operates.<br />

Aiming for impact<br />

These are partnerships aimed at co-created solutions, to which<br />

the company contributes funding, project management, corporate<br />

core competencies, and employee involvement. In such<br />

partnerships, companies aim for societal impact. As a second<br />

step, they can then also leverage the results of their efforts in<br />

stakeholder communications or marketing to achieve business<br />

benefits (e.g., an improved reputation, an enhanced brand<br />

image, or expanded markets).<br />

Enlightened self-interest<br />

Leveraging results for business benefit is what is called “enlightened<br />

self-interest,” and it is now a generally accepted<br />

concept. The thinking is as follows: If a company claims that<br />

they are doing good for society only because of their ethical<br />

convictions, stakeholders will most probably be skeptical and<br />

not believe them. If, on the other hand, companies are only<br />

concerned about their business benefit and neglect the needs<br />

of society, stakeholders will be outraged (and the company<br />

runs a clear risk of failing in the long run). What has emerged<br />

in corporate practice is a balanced, threefold approach: 1)<br />

striving for real societal impact, based on sound ethics and<br />

values; 2) implementing programs through co-creating community<br />

partnerships; and 3) leveraging results for improved<br />

reputation, brand image, and sales.<br />

Should companies undertake this work through a<br />

foundation?<br />

A foundation is often set up independent of – and therefore<br />

remote from – the company, which separates it from business<br />

interests. It is good for purely philanthropic giving, yet<br />

much less suitable for direct strategic community involvement<br />

initiatives. There are many legal limitations in profiling and<br />

involving the company, so added value from a foundation’s<br />

giving record cannot be leveraged directly through the company’s<br />

communications and marketing. Stakeholders also<br />

increasingly perceive starting a foundation as “outsourcing”<br />

a company’s contributions to society. Accordingly, it is more<br />

effective to deliver significant, strategic social impact from<br />

within the company, as an integral part of the business and<br />

the overall corporate responsibility / sustainability strategy<br />

that involves employees and core competencies.<br />

“As companies continue to strategize their corporate responsibility<br />

activities, corporate foundations become more popular as<br />

a way for companies to continue with charitable and philanthropic<br />

commitments (...) On the other hand, if companies want<br />

to distance themselves from philanthropy entirely, foundations<br />

might become less popular, with those already in existence<br />

either wound down or shifted towards a totally independent<br />

model.” (The SMART Company Report 2007)<br />

But are we all talking about the same thing?<br />

There is some confusion regarding terminology. Some companies,<br />

especially in the United States, still speak of strategic<br />

philanthropy, although they have progressed to sophisticated,<br />

strategic community involvement. Some companies, like IBM,<br />

Microsoft, and Disney, will call such strategic involvement<br />

their “corporate citizenship.”<br />

Philanthropy, in the strictest sense, is about donating money to<br />

charity, which is considered a hands-off approach. Community<br />

involvement, as defined in our book Corporate Community<br />

Involvement: The Definitive Guide, is about being involved in<br />

a charitable project as a co-creating and participating partner:<br />

co-creating the concept, co-managing the project, and contributing<br />

core competencies and employee involvement. Usually,<br />

measurement and evaluation as well as communication are<br />

also managed in partnership.<br />

Yet other companies that are doing “just philanthropy” will<br />

call this their corporate citizenship or their CSR – although,<br />

strictly speaking, a company’s corporate social responsibility<br />

extends also to its human resources and supply chain policies<br />

and to the management of its overall stakeholder relations.<br />

What are stakeholders looking for?<br />

Between the confusion of notions around strategic philanthropy,<br />

corporate community involvement, corporate citizenship, CSR,<br />

and the latest notion – shared value creation – what is it<br />

that the world’s stakeholders are looking for?<br />

Stakeholders may want to ask a few questions like “So what<br />

does your company do in this area?” The answers they hear<br />

will offer them more clarity on how the company is actually<br />

involved.<br />

that companies contribute more than just funds in strategic<br />

philanthropy. They want to see companies engaged with their<br />

best minds, and getting those best minds engaged in the community<br />

to co-create solutions and create collaborative impact.<br />

So this goes beyond donating money. It extends to contributing<br />

management know-how, problem-solving skills, as well<br />

as technological and scientific know-how.<br />

Coca-Cola, for example, unleashed its potential with programs<br />

such as the Replenish Africa Initiative, a $30 million, six-year<br />

effort to provide clean water and sanitation to at least two<br />

million people in Africa by 2015. Similarly impressive in ambition<br />

is the “five by 20” project, an initiative to economically<br />

empower five million women by 2020.<br />

This approach can then extend to shared value creation: Companies<br />

contribute solutions to societal problems and benefit<br />

from those solutions in their own bottom line, for example by<br />

opening new markets. The solar light bulbs in India that allow<br />

school children to study past dusk are a co-created education<br />

solution that is making the contributing companies real money.<br />

It is the same with BP’s solar cooking stoves.<br />

Whether we talk about strategic philanthropy, corporate<br />

community involvement, corporate citizenship, or shared<br />

value creation – we are dealing with an evolving field. It has<br />

evolved significantly and will continue to do so – we have<br />

not arrived at a final destination yet.<br />

The President of the World Business Council on Sustainable<br />

Development, Peter Bakker, says: “I’m committed to finding<br />

solutions, and I believe that businesses are powerful tools to<br />

bring these big challenges to resolution. Together, the WBCSD’s<br />

200+ members are galvanizing action in the global business<br />

community to create a more sustainable future.”<br />

Your company, with all its business competencies, has the most<br />

powerful means to contribute, and to be seen as an impacting<br />

partner by all relevant stakeholder audiences.<br />

Let’s get started.<br />

Stakeholders want to see contributions – but ideally more<br />

than just donations. In this day and age of the so-called new<br />

social contract, where governments, corporations, and civil<br />

society organizations are called on to collectively contribute<br />

and find co-created solutions through “collaborative governance”<br />

(notion first coined by Simon Zadek, then CEO of<br />

AccountAbility), they want to see corporate representatives<br />

engage at the meta level to think together with other sector<br />

representatives about finding solutions to our world’s pressing<br />

societal and environmental problems. They want to see<br />

For many years, Veronica Scheubel<br />

was in a global role as Senior Manager<br />

Corporate Responsibility at Nokia. She<br />

is co-author of the book Corporate<br />

Community Involvement: The Definitive<br />

Guide to Maximizing Your Business’<br />

Societal Engagement (Greenleaf/<br />

Stanford University Press 2010).<br />

30 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

31


Agenda<br />

Strategic Philanthropy<br />

From Competitive<br />

Advantage of Corporate<br />

Philanthropy to Shared<br />

Value<br />

The beginnings of corporate philanthropy<br />

To understand the global shifts in corporate philanthropy,<br />

visit GE, one of the world’s best known companies. GE was<br />

one of the earliest supporters, perhaps even innovators, of<br />

corporate philanthropy. The arc of GE’s corporate giving programs<br />

demonstrates key trends in the evolution of corporate<br />

philanthropy – an initial reliance on cash giving, leveraging of<br />

corporate assets, an increasingly global view, and more strategic<br />

investments that provided both social and business benefit.<br />

The GE Foundation began its grantmaking program in 1953. In<br />

the beginning, the company focused on educational institutions<br />

and launched the world’s first corporate matching gift program,<br />

which drew upon employees’ interests in and passions about<br />

contributing to their communities. In the 1970s, the GE Foundation<br />

started the National Action Council for Minorities in<br />

Engineering. The 1980s saw the start of grant-giving outside of<br />

the United States as well as the establishment of the company’s<br />

signature College Bound program, which was intended to increase<br />

the number of inner-city US students pursuing a college<br />

education. College Bound takes advantage of GE volunteers and<br />

expertise, thus leveraging more of the company’s assets than<br />

just its financial resources. In the last decade, the GE Foundation<br />

spearheaded a new program, Developing Health <strong>Global</strong>ly,<br />

which improves the infrastructure and management capacity<br />

of hospitals in Africa, Latin America, and Southeast Asia.<br />

GE’s 50-year corporate philanthropy story is quite a departure<br />

from the sentiment of Milton Friedman and his famous caution<br />

against corporate philanthropy becoming a distraction<br />

in the pursuit of profit maximization. In 1984, Peter Drucker<br />

suggested an alternative view when he wrote about the importance<br />

of other stakeholders beyond shareholders, and the<br />

necessity for companies to consider corporate philanthropy<br />

as one approach to address their needs. But this view was still<br />

very traditional and based on the personal values of corporate<br />

leaders or on reputations.<br />

The competitive advantage of corporate philanthropy<br />

In 2002, Porter and Kramer’s “The Competitive Advantage of<br />

Corporate Philanthropy” suggested a more profound role for<br />

corporate philanthropy. The authors suggested using corporate<br />

philanthropy to change a business’ “competitive context” – the<br />

factors that determine business success but that are beyond<br />

the direct control of business. Talent, prospering communities,<br />

and competitive rules and norms are all part of the enabling<br />

environment for business, and they are changeable through<br />

more strategic investments in corporate philanthropy. The<br />

graphic below shows the evolution in corporate philanthropy<br />

approaches toward this more strategic role.<br />

“The Competitive Advantage of Corporate Philanthropy”<br />

revealed powerful examples of companies making these<br />

more strategic investments. Grand Circle Travel, a leading<br />

travel company that caters to Americans over the age of 50,<br />

uses philanthropy to enrich the travel experience. Travelers<br />

who visit overseas locations have an opportunity to experience<br />

orphanages, cultural museums, and schools that are<br />

recipients of the Grand Circle Foundation’s gifts. In the<br />

process, financial support from the Grand Circle Founda-<br />

Companies´Approach to engaging with society is evolving<br />

By Kyle Peterson<br />

FSG, the nonprofit consulting firm which I help lead, has<br />

witnessed an amazing evolution in corporate philanthropy<br />

during the last 10 years. We have witnessed the unprecedented<br />

examination and gradual repurposing of corporate<br />

philanthropy. For anyone who cares about solving social<br />

problems, it has never been a better time to be part of the<br />

private sector.<br />

FSG started out 10 years ago as the Foundation Strategy Group,<br />

a consulting firm focused on helping private foundations<br />

amplify the value of their charitable contributions to society.<br />

Interestingly, companies were not part of our original focus,<br />

even though we were co-founded by Professor Michael Porter<br />

of the Harvard Business School. However, we quickly learned<br />

that companies’ philanthropic giving and, more importantly,<br />

business innovation, had an even more powerful potential to<br />

solve social problems.<br />

The three Harvard Business Review articles written by Michael<br />

Porter and Mark Kramer about companies’ role in society<br />

– “The Competitive Advantage of Corporate Philanthropy”<br />

(2002), “Strategy and Society” (2006), and “Creating Shared<br />

Value” (2011) – provide a fascinating trail of documentation<br />

on approaches to the shift in the corporate mindset. This commentary<br />

provides a brief summary of these three articles and<br />

what we have learned along the way.<br />

Traditional Reputation-Led Leveraged Strategic<br />

“What<br />

problems?”<br />

• Let´s ignore or understate<br />

the problem<br />

• Let´s minimize our<br />

responsibility<br />

• Philanthropy is about<br />

personal values<br />

“Problems could<br />

harm us.”<br />

• Let´s minimize the<br />

problem and throw<br />

some money at it<br />

• CSR & Philanthropy<br />

are about corporate<br />

reputation<br />

“We should do<br />

something.”<br />

• We need to add costs to<br />

fix the problem<br />

• We can use our core<br />

business capabilities to<br />

find solutions<br />

“We see<br />

opportunity.”<br />

• We can lower costs, grow<br />

revenues, or differentiate<br />

ourselves by addressing<br />

social problems<br />

• Even social problems<br />

we don´t affect pose<br />

opportunities<br />

32 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

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Agenda<br />

Strategic Philanthropy<br />

tion improves these cultural heritage spots and important<br />

centers of community.<br />

Looking back on the article and the discussions about it with<br />

companies, the idea of a strategic role for philanthropy was<br />

a relatively new insight. FSG received many questions about<br />

whether strategic corporate philanthropy was a form of “selfdealing,”<br />

a legal term that implies that a company directly<br />

benefits from a corporate philanthropy contribution. All of<br />

the examples mentioned in the article were proper forms of<br />

corporate philanthropy, as they provided only indirect benefits<br />

to the companies that made the contribution.<br />

Companies were also concerned about the repercussions of more<br />

strategic philanthropy on their existing grantees. We continue<br />

to recommend that companies employ a “portfolio approach”<br />

to corporate philanthropy, with allocations categorized into<br />

“communal obligation” (giving in the community where the<br />

company is located, motivated by the company’s desire to be<br />

a good citizen), “goodwill building” (funding based on the<br />

preferences of key stakeholders such as employees, customers,<br />

and community leaders), and strategic philanthropy (focused<br />

on the competitive context). The notion of companies giving<br />

across these three categories in their portfolio approaches<br />

continues to make practical sense.<br />

Strategy and society<br />

Following the publication of “The Competitive Advantage of<br />

Corporate Philanthropy,” the article authors and FSG were<br />

asked about the role of corporate social responsibility. After all,<br />

corporate philanthropy does not explain how a company should<br />

consider its environmental or social “footprint” or ways that it<br />

can create social value through its business. In 2006, Porter and<br />

Kramer released “Strategy and Society,” the second in a series of<br />

articles that further elaborated the role of corporations in society.<br />

The article gently questioned corporate social responsibility<br />

thinking, asserting that the “prevailing approaches to CSR<br />

are so disconnected from business as to obscure many of the<br />

greatest opportunities for companies to benefit society.” Even<br />

today, many companies view corporate social responsibility<br />

from three low-value perspectives: reputation, a defensive<br />

posture toward external stakeholders, and murky notions of<br />

sustainability. These justifications for CSR result in investments<br />

that have little relevance to shareholders, CSR departments<br />

that are disconnected from business operating lines,<br />

and “CSR ratings” based on those who appear to be active<br />

corporate citizens.<br />

A new framework was suggested, building upon the ideas<br />

from “The Competitive Advantage of Corporate Philanthropy.”<br />

The critical, new idea in this article was the observation that<br />

companies create more value for society through their business<br />

operations than through corporate philanthropy. This is a key<br />

idea that, frankly, is still met with suspicion, confusion, and<br />

doubt from companies today. Think about it: The 1 to 2 percent<br />

that a company can redistribute after it makes its profits pales<br />

in comparison to the financial resources, networks, influence,<br />

and problem-solving skills of its daily operations.<br />

The article took on one of the most obvious but often unexamined<br />

questions: Where should companies focus their<br />

attention to society? The framework prioritized social issues<br />

into three categories: generic (those that have little bearing on<br />

the company’s long-term competitive situation), value chain<br />

(issues that are significantly affected by a company’s activities<br />

in the normal course of business), and competitive context (the<br />

underlying drivers of a company’s competitiveness in places<br />

where it conducts business, as mentioned in “The Competitive<br />

Advantage of Corporate Philanthropy”).<br />

Among these issues, we noted that companies had a distinct<br />

choice. They could focus on the generic issues and mitigate<br />

the impact of their value-chain footprint or they could take<br />

another, more strategic path. The second, more strategic<br />

choice would focus on the value-chain issues that provide<br />

real business benefits to the company, such as cost-savings<br />

or a premium positioning, and the context issues that will<br />

ultimately determine their competitiveness.<br />

• Value-chain Issues: Whole Foods serves as a great example<br />

of this latter choice. While there is still significant room for<br />

improvement, the company is a leader among retailers in<br />

ensuring that its seafood comes from sustainable fisheries. It<br />

makes this choice because its customers care about sustainable<br />

seafood. But the company also knows that purchasing seafood<br />

from overfished areas is a recipe for its own disaster if it led<br />

to Whole Foods not being able to purchase more seafood in<br />

the future. Staying on the food service theme, food distributor<br />

Sysco increasingly purchases food from local farmers to<br />

reduce transportation costs and provide its customers with<br />

a source of competitive differentiation. Walmart has taken<br />

great strides in the last 10 years to reduce packaging costs<br />

and increase energy efficiency in its stores as well.<br />

• Competitive Context Issues: Competitive context serves as<br />

perhaps the most exciting area of potential investment for<br />

companies to provide mutual benefits. The example of Nestlé<br />

in India is illustrative of this new approach. When Nestlé’s<br />

milk factory in the northern district of Moga opened, only<br />

180 small, local farmers supplied milk. This was a significant<br />

problem in the company’s value chain as milk is the most<br />

important raw material for many of Nestlé’s products. Nestlé<br />

invested in small dairy owners and distribution points so that,<br />

after decades, the company now purchases from more than<br />

75,000 farmers in the region. The dairy farmers are much<br />

more prosperous than similar ones in other regions.<br />

Nestlé built refrigerated dairies, invested in veterinarians and<br />

agronomists – building the dairy system in Moga – to create<br />

what we now call “shared value.” Corporate philanthropy was<br />

not the tool of choice to serve the poor in Moga. Rather, Nestlé<br />

viewed the small dairy farmers as critical business partners,<br />

meriting serious investment for its long-term profitability.<br />

Creating shared value<br />

The Nestlé case served as a catalyst for the third and wellknown<br />

article in the series, “Creating Shared Value,” published<br />

at a time – January 2011 – when business was under siege.<br />

Despite the many dispiriting critiques of business that have<br />

held the public’s attention for the last two years, the article<br />

has established a welcomed note of optimism for the private<br />

sector’s relevancy in tackling social problems. The article<br />

articulates a clear and simple framework using this key idea:<br />

“Societal needs, not just conventional economic needs, define<br />

markets, and social harms can create internal costs for firms.”<br />

Three levels of “shared value” build upon several of the ideas<br />

in the previous two articles.<br />

1| Reconceiving products and markets: Rather than focus on<br />

conventional markets and fight for a “share of the market,”<br />

some companies are creating new products or adapting<br />

existing ones to enter new markets. GE’s Healthymagination<br />

program is researching the needs of the underserved<br />

in emerging markets and producing new products such as<br />

portable and battery-powered EKG machines that suit the<br />

needs of rural India.<br />

2| Redefining productivity in the value chain: Building upon<br />

ideas from “Strategy and Society,” this form of shared value<br />

pushes the conventional wisdom around sustainability issues.<br />

Companies’ value chains often create an impact on society.<br />

Companies have not always calculated the internal costs<br />

of these so-called externalities. When companies innovate<br />

within their value chains, they can save a great deal, such<br />

as by reducing excess packaging, as in the case of Walmart<br />

mentioned above. We are seeing companies take notice of<br />

these value-chain impacts to reduce the consumption of<br />

water, energy, and other natural resources. Other sharedvalue<br />

innovations include employee productivity, as demonstrated<br />

by investments in corporate wellness programs.<br />

3| Enabling Local Cluster Development: This last form of shared<br />

value is a re-articulation of Nestlé’s competitiveness context<br />

example. We see increasingly more examples of companies<br />

building local clusters – the supporting organizations and<br />

enabling environments for their competitiveness. As another<br />

example, Yara, a global leader in fertilizer production, has<br />

invested in delivery systems for its fertilizer deliveries in<br />

Africa. In this case, vital infrastructure is built that serves<br />

both business and societal interests.<br />

The three forms of shared value are having profound effects<br />

on business. From hiring and market research to the way companies<br />

measure their success, corporations are innovating well<br />

beyond their products, value chains, and external conditions<br />

for success. We are also seeing a new way of working with<br />

government and civil society. Nongovernmental organizations<br />

are shifting their role from being corporate philanthropic<br />

grantees to becoming business partners on product R&D, distribution,<br />

and cluster issues such as community development.<br />

Incubating and accelerating shared value through<br />

corporate philanthropy<br />

So, does corporate philanthropy still have a place in a world<br />

where companies are looking to gain competitive advantage<br />

by addressing social problems? This is one of the most frequently<br />

asked questions we hear as interest and excitement<br />

for shared value grows. Interestingly, like many of the other<br />

facets of business that are changing, corporate philanthropy<br />

is emerging as a powerful complementary incubation and<br />

acceleration tool for shared value.<br />

We are seeing companies such as Eli Lilly & Company, a leader<br />

in pharmaceuticals, use corporate philanthropy to build the<br />

health systems in countries such as Mexico, Brazil, South Africa,<br />

and India to deliver insulin for diabetes. Under its NCD Partnership<br />

program, the company invests in healthcare systems<br />

by training healthcare workers and partnering with NGOs to<br />

create awareness for the risk factors related to diabetes. The<br />

Verizon Foundation – the corporate philanthropy arm of the<br />

16th largest company on the Fortune 500 list – has teamed<br />

up with the University of Virginia to sponsor training programs<br />

for rural-based nurses that use telehealth technologies,<br />

which is an important area of business for the company. The<br />

Verizon Foundation’s grant incubates shared value as it helps<br />

thousands of underserved patients and creates new customer<br />

learning for the company.<br />

Of course, companies will continue to use corporate philanthropy<br />

to support the organizations in their hometowns and<br />

the interests of their employees and other stakeholders. But the<br />

rise of shared value is creating new opportunities for corporate<br />

philanthropy to be deployed in far more effective ways.<br />

Kyle Peterson is Managing Director<br />

at FSG, a nonprofit consulting firm<br />

specializing in strategy, evaluation, and<br />

research.<br />

34 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

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Agenda<br />

Strategic Philanthropy<br />

A <strong>Global</strong> Shift Toward<br />

Strategic Philanthropy<br />

We are witnessing an exciting global movement whereby philanthropists from both<br />

developed and emerging economies are using targeted and innovative approaches to<br />

address sustainable development. Today, strategic philanthropists are responsible for<br />

stimulating entrepreneurship and small business development in developing countries.<br />

These philanthropists are increasingly recognizing the importance of adopting a more<br />

business-like approach to philanthropy to maximize social and environmental returns of<br />

their philanthropic investments. Measuring impact is also a crucial component of successful<br />

philanthropy and has become more prominent globally. Evaluation helps to focus on results,<br />

ensures effective allocation of resources, and upholds accountability.<br />

By Punleuk Kam and Julia Yue<br />

Today’s discussions on philanthropy abound with new terms:<br />

“venture philanthropy,” “impact investing,” “entrepreneurial<br />

philanthropists,” “social venture capital.” This suggests there is<br />

a new generation of philanthropists who are using successful<br />

business models in order to address global challenges such<br />

as poverty, education, and health. They belong to the family<br />

of strategic philanthropists and are celebrated by the media<br />

for their hands-on approaches to philanthropy that focus on<br />

achieving outcomes and a willingness to take risks and embrace<br />

innovation. As philanthropic concepts evolve, it is difficult to<br />

draw the line between these new types of philanthropists. In<br />

many cases the terms are used interchangeably.<br />

Strategic philanthropists take a more businesslike approach<br />

and look for targeted and lasting impacts. They recognize<br />

that they need to apply innovative approaches to sustainable<br />

development, focus on entrepreneurial talent, and stress<br />

transparency, accountability, and long-lasting outcomes. They<br />

understand that local ownership is important to ensure that<br />

actual needs are being met and results are sustainable. Whereas<br />

traditional philanthropy often focuses on the inputs, this<br />

strategic approach focuses on results. In many cases, it builds<br />

on the entrepreneurial tradition of creating value and the<br />

understanding that a business approach focused on “returns”<br />

on investments (albeit financial, environmental, or social) is<br />

what is needed for lasting social change.<br />

The rise of local philanthropists in emerging economies<br />

Traditionally, the United States has dominated international<br />

philanthropy, with the country’s donations totaling $290.89<br />

billion in 2010. Philanthropy is a large part of the US culture<br />

and American citizens are encouraged to get involved at an<br />

early age. The picture in Europe is different compared to the<br />

United States. With roots that go back to medieval times,<br />

philanthropy is considered a private matter and a form of<br />

patronage or charity. Philanthropists do not want to be made<br />

public. Nowadays the European Philanthropy landscape is quite<br />

scattered, ranging from pure charity to social entrepreneurs.<br />

While facts and figures on European philanthropy are difficult<br />

to acquire, accumulated spending of EU-based foundations<br />

was assumed to total up to €51 billion.<br />

But, as major emerging markets grow, the number of local<br />

philanthropists in these countries is growing as well. Equally,<br />

the environment for philanthropy in these countries is maturing<br />

and governments are increasingly acknowledging the<br />

value of harnessing the expertise of wealthy entrepreneurs.<br />

Some examples of regional potential are highlighted below.<br />

In China, where rapid development has been accompanied<br />

by growing social and environmental concerns, the government<br />

increasingly sees the potential for philanthropy to<br />

36 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

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Agenda<br />

Strategic Philanthropy<br />

contribute to society and is considering joint efforts with<br />

private philanthropists. Chinese businessmen, such as Hong<br />

Kong-based Li Ka-Shing, have set up their own foundations<br />

and are increasingly forthcoming about their philanthropic<br />

givings. For example, in a joint effort with the Li Ka-Shing<br />

Foundation, China’s Ministry of Civil Affairs launched the<br />

Paediatric Hernia Rehabilitation Program in 2009 to provide<br />

free surgery for children.<br />

effort to make sustainable contributions in a locally relevant<br />

context, strategic philanthropists are increasingly looking for<br />

ways to align their efforts with local and international institutions<br />

working on tackling development challenges. With a<br />

strategic approach, transnational philanthropy can leverage<br />

local philanthropy built on domestic values. There are huge<br />

opportunities to explore, specifically relating to unlocking the<br />

entrepreneurial potential in developing countries.<br />

Similarly, philanthropy is rapidly growing in the Middle East<br />

region. New opportunities have arisen from lending based<br />

on shariah principles of shared success between the operator<br />

and financier of a venture. Affluent business leaders are<br />

bringing innovation to the usual targets of philanthropic giving.<br />

They also provide leadership by organizing their givings<br />

to be institutionalized, sustainable, and – increasingly – to<br />

be strategic. In the United Arabian Emirates “public-private<br />

partnership foundations,” such as the Emirates Foundation in<br />

Abu Dhabi, are based on the financial contributions of both<br />

governmental and quasi-governmental private donors who<br />

provide conditions for supporting causes that maximize impact.<br />

In Russia, until seven years ago there was not a single private<br />

foundation. As of 10 years ago, overall domestic philanthropic<br />

giving barely exceeded $100 million. Now there is a growing<br />

number of private foundations being established by wealthy<br />

Russians. But according to CAF <strong>Global</strong> Trustees, the majority of<br />

newly wealthy donors struggle to identify a long-term mission<br />

in their giving; they aspire to embrace strategic philanthropy<br />

but are still looking for effective ways to address specific Russian<br />

circumstances.<br />

In Africa, foundations financed solely by home-grown wealth<br />

are emerging. Sudanese Mo Ibrahim – founder of Celtel<br />

<strong>International</strong>, a telecommunications company in Africa and<br />

the Middle East currently known as Zain – stepped down as<br />

Celtel’s chairman to concentrate on his foundation, which<br />

aims to support good governance and great leadership in Africa.<br />

The Africa Grantmakers Network – created by organizations<br />

such as the African Women’s Development Fund, based in<br />

Ghana, and the Kenya Community Development Foundation<br />

– aims to “change the narrative of Africa as helpless and hapless,<br />

tilt the balance of stories, and increase the visibility and<br />

knowledge of Africa.”<br />

Besides a growing focus on local giving, philanthropy is becoming<br />

increasingly transnational. As global media makes<br />

world crises highly visible, philanthropists are more likely to<br />

give to causes beyond their own tax jurisdictions to support<br />

underprivileged communities around the world. Wealthy<br />

individuals will find better opportunities to make their transnational<br />

giving local by registering institutions abroad or by<br />

partnering with local peers to operate effectively and to ensure<br />

that real needs are being met in the focus countries. In an<br />

Having an impact and being accountable<br />

Strategic philanthropy has clear performance expectations<br />

and aims to find the best opportunities for achieving social,<br />

environmental, and/or financial returns. This involves a strong<br />

focus on impact and should therefore include a focus on<br />

measuring performance. Measuring impact helps to:<br />

Focus on results: Measuring impact enables both the investor<br />

and the entrepreneur to keep their attention focused on what<br />

is relevant and what they want to achieve.<br />

Measure or estimate value: Strategic philanthropists are looking<br />

to understand the social return on investment (SROI). This<br />

can be used to help make decisions through cost-benefit assessments<br />

and understanding ultimate impact.<br />

Ensure relevance and allocation of resources: Through measuring<br />

impact, investors can see if resources are being used efficiently<br />

and effectively. Investors can then evaluate if their investment<br />

was relevant in the chosen context.<br />

Be accountable: All enterprises have stakeholders that affect or<br />

are affected by the enterprise (for example suppliers, customers,<br />

employees, and local governments).<br />

What is required to focus on impact measurement is knowing<br />

which value is being created for the money that is spent.<br />

Measuring impact is not necessarily easy. Many of the existing<br />

measurement tools fail to give proper insight into the associated<br />

impact. As a result, many promising emerging market<br />

ventures with the potential for significant development impact<br />

are evaluated on “emotional” terms or on purely financial<br />

terms. Neither of the two will give a genuine, rational view<br />

of the full potential. With a growing interest in strategic<br />

philanthropy, impact, and the value created by philanthropists,<br />

there are a number of resources available to help you<br />

measure and understand the impact that your investments<br />

are generating.<br />

How can impact be measured?<br />

As philanthropy has a strategic approach, impact needs to<br />

relate back to the objectives of the philanthropists and the<br />

investees – they should hold themselves accountable if the<br />

objectives are not met. For philanthropists, measurement<br />

approaches can be divided into different purposes to fit their<br />

needs. Examples include:<br />

Screening – Making an investment decision “up front.” This<br />

approach helps to estimate and understand the potential and<br />

feasibility for a particular investment.<br />

Ongoing performance tracking – Helping philanthropists and<br />

investees understand progress and giving them the ability<br />

to continuously adapt and improve to ensure they meet the<br />

objectives.<br />

Periodic in-depth assessments – Providing a qualitative snapshot<br />

of benefits and their relevance at a given point in time.<br />

A strategic philanthropy approach enables wealthy individuals<br />

to focus on immediate results as well as on results over<br />

time. Venture philanthropists looking at measuring impacts<br />

will need to carefully consider the timeframe for which they<br />

are seeking returns.<br />

Punleuk Kam is Head<br />

of Private Banking<br />

Marketing Business<br />

Support for Western<br />

Europe / EEMEA &<br />

Americas at Credit Suisse.<br />

In 2010/2011 Punleuk<br />

led Credit Suisse’s PB<br />

Philanthropy Initiative.<br />

Julia Yue is a Vice President<br />

at Credit Suisse Securities<br />

(USA) LLC in Private<br />

Banking Marketing.<br />

She is responsible for<br />

planning and executing<br />

philanthropic initiatives<br />

for the US market.<br />

38 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

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Agenda<br />

Strategic Philanthropy<br />

Corporate<br />

Giving Has<br />

Become<br />

Increasingly<br />

Focused<br />

An interview with Charles Moore, Executive<br />

Director, Committee Encouraging Corporate<br />

Philanthropy (CECP).<br />

By Dr. Elmer Lenzen<br />

What is the history and mission of the Committee Encouraging Corporate<br />

Philanthropy?<br />

In 1998, Paul Newman approached Peter L. Malkin about<br />

creating an organization that would encourage companies to<br />

commit greater resources to charitable investments. Malkin<br />

invited David Rockefeller, Paul Volcker, and John C. Whitehead<br />

to join him in this effort as Honorary Chairs, and CECP was born.<br />

CECP was officially launched on November 18, 1999, at a<br />

press conference at Chase Manhattan Plaza. At this event, Paul<br />

Newman, John C. Whitehead, Peter L. Malkin, Walter Shipley,<br />

and other business leaders called upon companies to respond<br />

to the needs in their communities.<br />

CECP has since grown to include more than 180 CEO members<br />

– representing more than 150 major corporations and<br />

approximately $10 billion in annual corporate giving.<br />

CECP’s mission is to lead the business community in raising<br />

the level and quality of corporate philanthropy. CECP believes<br />

that discipline applies to corporate giving, like any other business<br />

function. When companies demonstrate programmatic<br />

effectiveness, fiscal accountability, and good stewardship in<br />

their giving programs, society and business both stand to<br />

benefit greatly.<br />

You want to raise the level and quality of corporate philanthropy. Can<br />

you explain to us how you will do this?<br />

CECP exists to inspire companies – starting with the<br />

CEOs – to engage with their communities in increasingly<br />

impactful ways; to understand that they have unique assets<br />

and skills that communities need, today more than ever. This<br />

is hard work, and as such, CECP very thoughtfully and strategically<br />

provides the tools to facilitate companies’ involvement<br />

in their communities. It is not just about doing more – it is<br />

also about doing so in ways that bring results.<br />

What is the main motivation for CEOs to engage with CECP and what<br />

kind of benefits will they receive?<br />

CECP is a network of peers. CEOs join to be a part of an<br />

action-oriented learning environment. They push each other<br />

to do more. CECP provides the motivation and incentive<br />

for CEOs to make corporate giving a priority. CECP is also<br />

a repository of best practices and resources. It equips CEOs<br />

and their senior societal engagement staff with the data<br />

and research necessary to infuse effective giving strategies<br />

throughout their work.<br />

CECP holds two annual events for its members. CECP’s Board of<br />

Boards CEO Conference is a unique opportunity for corporate<br />

leaders to share insights and best practices, and to help advance<br />

the business case for global corporate community investment.<br />

By participating in this event, global CEOs demonstrate their<br />

commitment to CECP’s mission.<br />

CECP also gathers together the senior corporate giving staff of<br />

member companies to share cutting-edge research, provide<br />

the opportunity to hear NGO and CEO perspectives in panel<br />

discussions, and feature keynote speakers such as, most recently,<br />

Arianna Huffington, President and Editor-in-Chief of<br />

Huffington Post Media, and Cory Booker, the Mayor of Newark,<br />

New Jersey. CECP releases a first look at the analysis of the<br />

Philanthropic Societies<br />

Around the World<br />

Asian Foundation for Philanthropy<br />

TrustAfrica<br />

The Asian Foundation for Philanthropy (AFP) is a UK-based charities in India. The development-awareness program “Jagruti”<br />

TrustAfrica is a Senegal-based public foundation that<br />

collaborative project grants, and technical assistance. The<br />

charity that was established in 2005 to provide a channel for the aims to raise awareness about development issues being faced<br />

strives to secure conditions for democratic governance and foundation’s program currently focuses on “Democracy<br />

South Asian Diaspora Group to better engage with development globally and to relate these to South Asia. Moreover, it works<br />

equitable development throughout the continent. Initiated and Civil Society” to secure conditions for democracy by<br />

initiatives in India. Using its network and research expertise, the in cooperation with Asian businesses on the topic of corporate<br />

in 2001, it works principally through collaborations and strengthening the capacity of civil society organizations;<br />

AFP provides avenues toward donating, volunteering, and fundraising<br />

social responsibility. By supporting the Asian Diaspora with<br />

partnerships with like-minded institutions and donors “Equitable Development” to foster African enterprises<br />

for grassroots causes related to social and economic philanthropic advice on where to invest social capital, the “Daan”<br />

across Africa. TrustAfrica aims to develop lasting solutions and achieve broadly shared prosperity; and “African<br />

challenges. The AFP realizes its mission through three key focus<br />

program provides an efficient channel for donating. It gives an<br />

to such intractable challenges as violence, discrimination, Philanthropy” to leverage African resources for democracy<br />

programs. The international volunteer program “Paropkaar” informed overview of donation opportunities that are transpar-<br />

and economic isolation though agenda-setting workshops, and development.<br />

enables British Asians to share their skills and experiences with ent, accountable, and that reach the intended recipients.<br />

40 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

41


Agenda<br />

Strategic Philanthropy<br />

previous year’s corporate giving data through the Corporate<br />

Giving Standard (CGS) results during the Summit.<br />

CECP provides a platform to share the important work its<br />

member companies are doing in societal engagement. CECP<br />

presents an annual Excellence Awards in Corporate Philanthropy<br />

in a special ceremony. The awards recognize corporate<br />

giving programs that excel in the areas of CEO leadership,<br />

dedication to measurement, partnerships, and innovation.<br />

CECP also spearheads the annual <strong>International</strong> Corporate<br />

Philanthropy Day, which focuses attention on the community<br />

engagement activities of member companies all over the world.<br />

Successful philanthropy has to include not only the top management<br />

levels but also the employees. How do you foster such a culture in your<br />

member companies?<br />

One of the most important things CECP does is share<br />

successful case studies. Companies learn from each other<br />

about the ways to engage employees through their societal<br />

engagement activities.<br />

CECP also shares trend data about how companies are engaging<br />

their employees. Companies use this data to benchmark<br />

their work and answer key questions, such as, “What are other<br />

companies in our industry doing to engage employees?” “What<br />

are new practices in employee engagement?”<br />

CECP has published important research on these issues over<br />

the years, such as its work with Taproot to value pro bono<br />

work. It has also worked with partners such as Points of Light<br />

and A Billion + Change on the issues of employee engagement<br />

and skills-based volunteering.<br />

Each year on the fourth Monday in February, the corporate community,<br />

led by CECP, observes <strong>International</strong> Corporate Philanthropy Day – an<br />

international advocacy day. Can you tell us what happens on this day?<br />

CECP member companies and partner organizations plan<br />

societal engagement initiatives and announcements around<br />

this day, and CECP works with partner organizations to communicate<br />

the overall benefits and importance of corporate<br />

philanthropy.<br />

<strong>International</strong> Corporate Philanthropy Day (ICPD) is an opportunity<br />

to:<br />

• Tell a company’s philanthropy story on an internationally<br />

recognized day.<br />

• Further engage senior management, employees, and nonprofit<br />

partners in a company’s giving programs.<br />

• Raise awareness of the important role of corporate societal<br />

engagement in fostering stronger relationships across sectors.<br />

• Publicize a company’s philanthropic initiatives, benefiting<br />

from the added media interest.<br />

• Enhance relationships with peers and thought leaders in the<br />

corporate giving community.<br />

CECP values its strong partnership with the UN around ICPD.<br />

The Secretary-General of the United Nations, Ban Ki-moon,<br />

issued a proclamation on ICPD in <strong>2012</strong>, commending CECP<br />

for its leadership and urging corporations to support the UN’s<br />

Millennium Development Goals. In partnership with CECP,<br />

the UN Economic and Social Council and the UN Office for<br />

Partnerships host a special program on opportunities for philanthropy<br />

to help advance the Millennium Development Goals.<br />

Additional ICPD activities include:<br />

• Letting corporate giving officers from CECP member companies<br />

ring The Opening Bell SM at the New York Stock Exchange.<br />

• Landmarks around the world light up in the colors of ICPD<br />

– blue and green – to mark the occasion: Trafalgar Square<br />

in London; the Empire State Building; Con Edison Tower; 55<br />

Water Street in New York; and the clock tower of the Wrigley<br />

Building in Chicago.<br />

The next ICPD is on February 25, 2013.<br />

CECP created the Corporate Giving Standard – an online data collection,<br />

reporting, and measurement tool – to provide immediate insight for<br />

companies on how to compare their philanthropy budgets. Can you<br />

explain that tool to us?<br />

The Corporate Giving Standard is a unique peer-benchmarking<br />

tool for corporate giving professionals. The CGS is<br />

an annual survey that provides participants with online and<br />

on-demand access and customized reports. Each year through<br />

its CGS survey, CECP collects and reports data on numerous<br />

aspects of corporate giving programs internationally. Launched<br />

in 2001, the CGS now features more than $105 billion in<br />

corporate giving data.<br />

The CGS allows peer-to-peer company comparisons, aggregated<br />

industry benchmarks, and internal year-over-year<br />

spending analyses for CECP members and measurement<br />

subscribers.<br />

What are the main trends that you have observed through the CGS?<br />

The first analysis of 2011 corporate giving data – the most<br />

recent data available – reveals that a majority of corporations<br />

worldwide have increased their giving year-over-year. According<br />

to the CGS survey – conducted by CECP in association<br />

with The Conference Board – companies are driving toward<br />

restoring corporate giving to pre-recession levels.<br />

Key CGS indicators for 2009–2011 tracked through a threeyear<br />

matched set of companies that responded include:<br />

• Median total giving was $24.4 million, which is slightly less<br />

than 2010 levels ($24.6 million) but well above 2009 levels<br />

($22.6 million).<br />

• 60 percent of companies increased their total giving as compared<br />

to 2009.<br />

• 48 percent of companies increased their giving by more than<br />

10 percent.<br />

• The Consumer Staples (25%) and Health Care industries (25%)<br />

had the largest amount of growth in giving.<br />

• Of the companies that saw increases in giving from 2009<br />

to 2011, direct cash was the most prevalent form of giving<br />

(median percent change of 18%).<br />

On top of this overall growth, three major trends emerged<br />

from the 2009–2011 data:<br />

• Corporate giving became increasingly focused.<br />

• Employee matching gift and engagement programs were<br />

high priorities.<br />

• <strong>International</strong> giving was on the rise, largely driven by significant<br />

revenue growth abroad.<br />

CECP has been preparing for this rise in global giving through<br />

its <strong>Global</strong> Corporate Giving Initiative. This work began when<br />

CECP played a leading role in developing – with the United<br />

Nations <strong>Global</strong> <strong>Compact</strong> – the first Principles for Social Investment<br />

(PSI), a set of voluntary principles to guide the ongoing<br />

practice of social investment by organizations seeking to increase<br />

the scalability and impact of charitable contributions.<br />

The PSI were adopted by UN Secretary-General Ban Ki-moon,<br />

demonstrating the commitment of global organizations and<br />

companies to measure and hold themselves accountable for<br />

their charitable giving.<br />

A <strong>2012</strong> CECP report, The <strong>Global</strong> Guide to What Counts: A Defining<br />

Moment for Corporate Giving, follows up that important<br />

work to provide corporations with a much needed tool to<br />

allow for more efficient measurement of corporate giving on<br />

a global scale. The definitions created by the initiative will enable<br />

a major shift away from corporations’ reliance on various<br />

country tax codes to determine what counts as a contribution<br />

that benefits society – a reliance that has complicated the<br />

practice of tracking international giving.<br />

Find out more:<br />

www.corporatephilanthropy.org<br />

Arab Foundations Forum<br />

The European Association for Philanthropy and Giving<br />

The Arab Foundations Forum (AFF) is a pan-Arab<br />

main areas. Firstly, it strives for stronger technical support<br />

The European Association for Philanthropy and Giving sectors, and causes. The EAPG’s program consists of<br />

association of foundations based in Jordan that have the that will translate into greater transparency, more effective<br />

(EAPG) is a UK-based membership network that combines events, roundtable programs, publications, and web-based<br />

aim of strengthening the capacity and infrastructure of Arab systems, and illustrate the values behind philanthropy.<br />

the experience, knowledge, and technical expertise of all the resources on technical, strategic, and topical issues relating<br />

philanthropy by providing funders with a networking structure Secondly, the association works on creating effective policy<br />

professions that are involved in the provision of philanthropy to philanthropy. Through strategic campaigns, the EAPG<br />

in the Arab region. The Forum was established in 2006 and structures to advance transparency, accountability, and<br />

and procurement of charitable giving advice to their clients aims to support and ensure that policies and regulations<br />

works as a platform for philanthropists to share information, social responsibility among Arab foundations, including<br />

and donors. Since its establishment in 1998, the EAPG has are developed that encourage philanthropic activity in a<br />

foster dialogue, share experiences, and support one another the implementation of a code of practice. Finally, it seeks<br />

been offering guidance about philanthropy across borders, domestic and cross-border context.<br />

in reinforcing social development through mobilizing private to improve efforts in the areas of networking and capacity<br />

capital for public benefit. The AFF program addresses three building.<br />

Compilation by Karen Rieckmann<br />

42 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

43


Inside ...<br />

Agenda<br />

CSR in Latin America<br />

Latin America<br />

CSR in Latin America:<br />

A General View<br />

By Estrella Peinado-Vara<br />

Multilateral Investment Fund<br />

Member of the IDB Group<br />

It is difficult to generalize when examining companies’ social and<br />

environmental responsibility situations in Latin America, largely due<br />

to the economic, social, and cultural differences in the region. Mexico,<br />

Central America, the Caribbean, the Andean region, and Southern<br />

Cone share many similarities but are separated by many differences. In<br />

addition, similarities and differences also occur within the countries; this<br />

adds to the variety of topics covered by CSR, the various approaches that<br />

companies may have to it, and does not allow for general statements<br />

about the complexities of the social and environmental problems facing<br />

Latin America. This article addresses some of the peculiarities of CSR in<br />

Latin America in terms of topics, tools, and relevant issues, including<br />

differences between itself and other regions, particularly Europe.<br />

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45


Agenda<br />

CSR in Latin America<br />

Issues such as the environment, human rights, child and forced<br />

labor, working conditions, and anti-corruption are common<br />

interests throughout the world. However, having identified<br />

these overarching issues, it must be pointed out that the priorities<br />

of Latin America differ from those of Europe, the United<br />

States, and Canada. Labor issues in this region have not been<br />

sufficiently addressed by most national laws (compared to<br />

Europe), so they are a priority. The high disparity of income<br />

levels also makes economic inclusion an urgent matter, one<br />

that needs to be addressed in order to reach the poorest and<br />

most vulnerable in a practical and effective way. There are<br />

also countries in which certain sectors dominate the economic<br />

sphere, and of course the CSR sphere, such as mining in Chile<br />

and Peru. Additionally, in other countries of Latin America,<br />

social conflict is widespread and the need must be focused<br />

on how to cope using the help of the private sector, as is the<br />

case in Colombia.<br />

The progression of CSR requires certain conditions. These are<br />

the same conditions that are required for a good business climate:<br />

an optimal regulatory and fiscal framework, financial<br />

markets, and institutions that function, among other things.<br />

Clearly, there are still many difficulties that slow CSR progress<br />

in Latin America more than in other regions, such as weaker<br />

institutional capacity and corporate governance and less<br />

favorable business environments. Some capital markets are<br />

relatively underdeveloped; therefore, issues such as corporate<br />

governance are not a priority. Nonetheless, there are also initiatives<br />

such as the BM&FBOVESPA Novo Mercado (the New<br />

Market listing on the Brazilian Securities, Commodities and<br />

Futures Exchange) that require certain governance conditions<br />

that also support sustainability issues.<br />

As for the regulatory framework and regarding the difficulties<br />

in Latin America, in some cases there are regulations on environmental<br />

conservation, labor rights, protection of consumer<br />

rights, corporate governance, and business ethics. However,<br />

sometimes the scope is very limited and it is difficult to enforce<br />

compliance. Brazil, Chile, Mexico, and Argentina are some of<br />

the countries that have implemented legal reforms related to<br />

corporate governance and the stock market.<br />

From a management standpoint, CSR performance indices and<br />

tools that present the business case have not yet been developed<br />

in their entirety. It is indisputable that there are business<br />

benefits, but the full causation is still difficult to establish and,<br />

therefore, it is also difficult to convince everyone of how good<br />

it would be to conduct business in a sustainable fashion. The<br />

most dangerous misconception is that operating in a socially<br />

and environmentally responsible way is an expense and not an<br />

investment with returns in the short, medium, or long term.<br />

This has led many managers to underestimate the power of CSR.<br />

However, some methodologies adapted to national realities<br />

have begun to emerge. These methodologies seem more convincing<br />

since they reflect better the local social and business<br />

situations. This is the case with some indicators developed by<br />

the Ethos Institute in Brazil, and its Spanish versions, translated<br />

and adapted by the Instituto Argentino de Responsabilidad<br />

Social Empresaria. It is also the case for specific indicators for<br />

Central America, developed by local networks promoting CSR,<br />

as well as management models of CSR for small and medium<br />

enterprises, such as the network developed by Forum Empresa<br />

(network of national organizations that promote CSR in the<br />

Americas) or Deres in Uruguay. However, the practical implementation<br />

is still limited.<br />

A responsible private sector<br />

The good news is that companies in Latin America are realizing<br />

the need for responsible behavior. In the region, there are<br />

three conditions that favor the development of a responsible<br />

private sector. First, the presence of multinational corporations<br />

concerned about financial, social, and environmental sustainability<br />

that maintain the standards of the parent companies. In<br />

this case, the domestic company imports and adapts the parent<br />

company’s CSR practices. There are some cases where the opposite<br />

occurs and the local model is exported to other markets,<br />

including the parent company’s model, as was the case with the<br />

practices of Danisco’s human resources in Brazil. Second, reactive<br />

behaviors are also common. There are companies that learned<br />

the hard way and realized the importance of the social license<br />

to operate, or that learned about environmental sustainability<br />

only after suffering negative consequences (boycotts, litigations,<br />

etc.) due to their irresponsible behaviors (labor disputes, community<br />

conflicts, environmental disasters, etc.). Third, many<br />

civil society organizations, multilateral development organizations,<br />

and visionary leaders are promoting CSR and the impact<br />

that companies can have on economic and social development.<br />

Linked to this last point, numerous organizations have been<br />

making progress in promoting CSR since the late 1990s: global<br />

organizations like the World Business Council for Sustainable<br />

Development – which has national chapters in almost every<br />

country in Latin America – or the 19 organizations that are<br />

part of Forum Empresa, representing Argentina, Brazil, Canada,<br />

Chile, Colombia, Costa Rica, Ecuador, El Salvador, Honduras,<br />

Mexico, Nicaragua, Panama, Paraguay, Peru, United States,<br />

Uruguay, and Venezuela.<br />

Some of these institutions have been supported by multilateral<br />

efforts from the likes of the World Bank, the Organization of<br />

American States, and the Inter-American Development Bank,<br />

which, through its Multilateral Investment Fund, has promoted<br />

responsible social and environmental practices through research,<br />

publications, and financial support. One of the highlights of<br />

their promotional efforts is the Inter-American Conference on<br />

CSR, which has been held annually since 2002. The financial<br />

support has focused on institutional strengthening and implementation,<br />

especially regarding value chains and initiatives for<br />

private sector contributions to equitable economic development.<br />

Other global initiatives worth mentioning are the Equator<br />

Principles, the <strong>Global</strong> Reporting Initiative, and obviously the<br />

United Nations <strong>Global</strong> <strong>Compact</strong> because of its relatively high<br />

success among businesses interested in Latin America. Each<br />

initiative operates within its own sphere of action. Sometimes<br />

they are confronted with certain limitations due to the nonbinding,<br />

voluntary nature of their principles or guidelines and<br />

because sometimes there is no method of verification. However,<br />

they have proved to be effective promotional tools for CSR, its<br />

complexities, and its realities, and they have demonstrated<br />

the need for company-led action. These organizations and<br />

initiatives have two objectives. The first objective is to build<br />

a strong business case to prove that, in order to maximize<br />

profits, companies need to take into account their environmental<br />

impact, human rights records, labor conditions at their<br />

facilities, and anti-corruption measures, or they must suffer<br />

the consequences. The argument does not revolve around<br />

maximization of profits versus socially and environmentally<br />

responsible operations. Nowadays, the conversation is about the<br />

need to implement socially and environmentally responsible<br />

practices to maximize profits. The second objective – very<br />

much reflecting the reality of Latin America and the Caribbean<br />

– consists of working toward more equitable societies,<br />

which, in turn, will make it easier for businesses to thrive.<br />

Relevant issues for Latin America<br />

The priorities for businesses and the expectations of stakeholders<br />

in Latin America are similar to those of developed countries,<br />

but not exactly the same. There are universal themes such<br />

as the environment, human rights, working conditions, and<br />

forced labor, which are becoming more important, mostly in<br />

developing countries. Environmental and climate change issues<br />

are becoming particularly relevant for emerging economies<br />

in Latin America, since there has been gradual economic and<br />

productive growth. But this growth has not been accompanied<br />

by environmental legislation, all while there has been an<br />

increase in the use of natural resources.<br />

1| Environment<br />

Some large companies have taken initiatives to reduce their<br />

environmental impact in terms of emissions and consumption<br />

of energy and water resources. This is the case of CEMEX. As a<br />

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47


Agenda<br />

CSR in Latin America<br />

“multi-Latin” company that produces and distributes building materials<br />

and cement in over 50 countries in the Americas, Europe,<br />

Asia, and the Middle East, their operations have a significant<br />

environmental impact on CO 2<br />

emissions. It is an energy-intensive<br />

industry with high impact because of the quarries as well as<br />

the transportation and manufacturing processes. The company<br />

has developed a sustainability management strategy, including<br />

using substitute materials that require less energy in processing<br />

alternative energy sources (biomass, reuse of waste materials as<br />

oils, solvents, and tires) and renewable sources (wind), and it is<br />

also searching for more energy-saving methods in the process.<br />

Also an important environmental issue for countries like<br />

Brazil and Colombia is the loss of biodiversity. Natura in<br />

Brazil is a cosmetics and personal hygiene company (with a<br />

direct sales force of resellers in over 5,000 cities in Argentina,<br />

Chile, Peru, Mexico, Venezuela, Colombia, and France). The<br />

company aims to contribute to sustainable development by<br />

focusing on environmental conservation and biodiversity. One<br />

of its features is the use of natural products; it buys part of<br />

its inputs in terms of fair trade and organic origin and pays a<br />

premium of 15 percent on average.<br />

2| Economic opportunities for the excluded<br />

About 360 million people (or about 70 percent of the Latin<br />

American and Caribbean populations) live on less than $300<br />

per month. One mechanism that is yielding results is the<br />

inclusion of low-income and vulnerable populations in value<br />

chains as commercial partners. It is about creating economic<br />

opportunities for groups and entrepreneurs from the base of<br />

the economic pyramid who – with some support, training,<br />

and technical assistance – can provide goods and services to<br />

businesses. These are creative solutions implemented by the<br />

companies that solve business issues and contribute to the improvement<br />

of living conditions of disadvantaged communities<br />

while expanding markets and increasing profitability. Business<br />

initiatives now offer creative solutions that also successfully<br />

contribute to alleviating poverty and social problems.<br />

These 360 million people should also be seen as potential<br />

clients and customers. Many of them have no access to basic<br />

services like water, energy, education, health, and financial<br />

resources. Infrastructures are deficient and the governments<br />

are failing to provide these services in an efficient way. For<br />

example, about 40 million people do not have access to a reliable<br />

energy source in the region. In these cases, and from a<br />

developmental standpoint, priority should be given to models,<br />

products, and services that offer strategic guidance in helping<br />

to improve the lives of the people (such as providing access<br />

to water, energy, education, and health) rather than simply<br />

searching for the market potential at the base of the pyramid<br />

per se (which can lead to increased indebtedness of the population<br />

or unnecessary consumption).<br />

Masisa is an example of a company that has a comprehensive<br />

approach to sustainability, closely linked to business development<br />

with the base of the pyramid to combat poverty and<br />

exclusion. Masisa, with the help of the Multilateral Investment<br />

Fund, supports training for building and assembling furniture<br />

that is specially designed for very low-income households.<br />

This also generates employment for the same groups through<br />

manufacturing and assembling.<br />

3| Labor conditions<br />

Responsible management of human resources and ensuring<br />

fair working conditions, security, and decent wages are particularly<br />

important since labor laws in many Latin American<br />

countries may be insufficient. Some cases of forced labor, the<br />

use of child labor, or extreme working conditions in some<br />

labor-intensive sectors have required action in the development<br />

of fairer and more responsible practices – not only for<br />

the impact on the image of companies, sectors, and countries,<br />

but also for productivity reasons. Furthermore, the lack of<br />

provision of basic services by the state, such as education<br />

and health, allows companies to expand their functions and<br />

provide these services for their own good as well as to have<br />

human resources available to them that are healthy and<br />

educated. Volkswagen in Brazil created primary care clinics in<br />

its plants, which significantly reduced employee absenteeism.<br />

Ingenios Pantaleon sugar mills in Central America improved<br />

working conditions and provided accommodations for temporary<br />

workers – mostly displaced people during the harvest<br />

season – and these practices resulted in higher productivity.<br />

There have been improvements in labor conditions, but it<br />

is certainly one of the pending issues that would have the<br />

greatest impact and a multiplier effect on the welfare of the<br />

population of Latin America.<br />

Different approach<br />

In comparison with Europe, the differences in Latin America<br />

are striking, firstly because of the level of development of<br />

the overall market (institutions, incentives, legal framework,<br />

etc.). For example, what in some emerging countries in Latin<br />

America are considered a model of responsible practices<br />

concerning working conditions are the bare legal minimum<br />

in other, more developed countries. In general, the existence<br />

of the welfare state, strong institutions, and supranational<br />

organizations such as the European Union, which supports<br />

the development of a more responsible private sector, change<br />

the circumstances substantially.<br />

The social and environmental consequences of uneven economic<br />

development play a role. In Europe, up until now,<br />

companies, civil society, and the state can meet their responsibilities<br />

more easily, while in Latin America, the private sector<br />

has to assume additional responsibilities (training, education,<br />

health, access to basic services) if it wants to operate under<br />

certain favorable conditions. Companies have little or no choice<br />

but to be creative and implement initiatives to address these<br />

market – or, rather, state – failures.<br />

Another issue is the pressure that stakeholders have over the<br />

companies, which is usually very closely linked to the level of<br />

development and the level of activism of the right stakeholders.<br />

In Europe there is a deeply rooted tradition of a social economy<br />

where businesses, government, civil society, and unions each<br />

have their reserved space and actively participate in most<br />

decision-making processes. This dynamic does not exist in<br />

most Latin American countries – civil society organizations,<br />

which could play a control role and act as the voice of citizens<br />

(or some groups), are generally weaker. Precisely for all these<br />

reasons, the expectations placed on the private sector in lessdeveloped<br />

countries are greater.<br />

Public policy<br />

Specific public policies on CSR in Latin America are almost<br />

nonexistent. However, the necessary policies would be those<br />

for the promotion and creation of incentives that encourage<br />

more responsible behavior. Public policies should retain the<br />

voluntary nature of CSR, without forgetting that there are basic<br />

issues to cover such as human rights, child labor, pollution,<br />

functioning financial markets, etc.<br />

Basically, the public sector’s role should be to implement<br />

measures to streamline the business climate first and foremost,<br />

and once this happens, it can create or provide incentives<br />

for responsible behavior. The market should be developed<br />

in such a way that consumers, funders, employees, and civil<br />

society would each have a role in making companies become<br />

more responsible. In Latin America there is a pressing need<br />

for strengthening the civil society and establishing – with<br />

government support – more opportunities for dialog among<br />

the stakeholders. This could also help improve the bad image<br />

(sometimes rightly, sometimes not) that the private sector has<br />

in many Latin American countries.<br />

How to promote CSR in Latin America<br />

There may be different approaches in promoting CSR in Latin<br />

America and the Caribbean, but to convince business managers,<br />

nothing is better than using the business case. CSR is not only<br />

profitable, it is necessary to improve business competitiveness<br />

and help contribute toward improving the lives of many people.<br />

CSR not only can enhance business competitiveness but also<br />

contribute toward equitable development.<br />

Business associations enjoy a privileged position in promoting<br />

responsible business behavior through advocacy and training<br />

of key personnel in companies. In addition to supporting the<br />

initiatives of industry associations to which they belong, companies<br />

can take a leadership role. They can show to their peers<br />

that CSR is “working,” in addition to requiring responsible<br />

behavior of their suppliers, distributors, and other companies<br />

within their value chains.<br />

Conclusion<br />

Latin America faces a series of obstacles in furthering the<br />

development of CSR. These difficulties are the same barriers<br />

that private-sector development faces (weak institutions and<br />

business climate). Legislation is not conducive, and disbelief<br />

or skepticism about the business case of CSR is still apparent.<br />

In order to overcome the barrier of skepticism, it is necessary<br />

to convey the business case and show it – perhaps more in<br />

emerging countries than elsewhere because of the additional<br />

challenges. Numerous examples show that no matter the<br />

industry, its size, or the social issue, companies must find<br />

their own models for implementation of CSR to be profitable.<br />

Inevitably, CSR in Latin America is different from that<br />

in Europe because of very different realities.<br />

The business sector in Latin America cannot ignore the lack<br />

of infrastructure and weak institutions. Producing goods and<br />

services responsibly can help alleviate some of these shortcomings,<br />

or at least contribute to social stabilities that influence<br />

some of these elements in the background.<br />

CSR is becoming increasingly more common in the region,<br />

but a lot still needs to be done regarding the promotion,<br />

implementation, monitoring, impact measurement tools, as<br />

well as issues that concern the public and social sectors. In<br />

emerging economies, as in most Latin American countries, the<br />

private sector (with the drive and the support of the public<br />

and social sectors) has the capabilities and tools to generate<br />

wealth while contributing toward more equitable economic<br />

and social development. A responsible private sector is the<br />

best guarantee of progress for the region.<br />

Estrella Peinado-Vara is a Senior<br />

Specialist at the Multilateral Investment<br />

Fund (MIF) of the Inter-American<br />

Development Bank (IDB). She works at<br />

the IDB since 2002, focusing on privatesector<br />

development, corporate social and<br />

environmental responsibility, and value<br />

chain. She holds an MBA from Georgetown<br />

University (Washington, DC).<br />

48 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

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Inside ...<br />

Agenda<br />

CSR in Latin America<br />

Latin America<br />

By Prof. Paul Alexander Haslam<br />

An Evolving<br />

CSR System in<br />

Latin America<br />

A decade ago, corporate social responsibility had only just<br />

emerged on the agendas of businesses operating in Latin<br />

America. Corporate commitments were limited to the largest<br />

firms, usually the multinationals; public awareness and demand<br />

for corporate responsibility was low; governments were<br />

uninvolved; and civil society organizations promoting CSR<br />

were still new and, for the most part, funded from elsewhere.<br />

In the last 10 years, corporate social responsibility has matured.<br />

Firms of many sizes are turning to CSR, public awareness has<br />

grown, and civil society has increased the local ownership of<br />

the concept in a way that connects with the long-standing<br />

ethical expectations of these societies. However, outside interests<br />

remain influential in the promotion of this concept,<br />

namely via multinational corporations headquartered in the<br />

North and their governments, multilateral funding agencies,<br />

private foundations, and, most recently, internationally networked<br />

NGOs.<br />

This article examines the important changes that have occurred<br />

in the evolution and practice of CSR in Latin America<br />

over the last decade. In particular, it takes a second look at<br />

the key relationships behind the development of CSR in the<br />

region – described elsewhere as the “CSR system.”<br />

A decade of CSR<br />

The context for CSR is different in Latin America than in most<br />

developed countries. The countries of the region are considered<br />

to be “developing” – the majority of which fall into the<br />

“upper-middle income” category. Latin America is nonetheless<br />

characterized by high levels of poverty and inequality: The<br />

indigent and non-indigent poor were estimated to comprise<br />

30 percent of the population in 2011. In the aftermath of two<br />

decades of globalization, liberalization, and privatization, companies<br />

have become more prominent in the lives of citizens<br />

in a context where the reach of the state is often limited. CSR<br />

beyond compliance with the law does not mean much when<br />

the law itself is often poorly enforced. For this reason, social<br />

struggle and advocacy in Latin America has been focused on<br />

the extension and defense of citizenship rights vis-à-vis the<br />

state. In other words, although corporations can contribute<br />

more to development in Latin America, we should not forget<br />

that more effective state regulation of business activities is a<br />

precursor to better CSR.<br />

Although it is important to contextualize the limits of CSR in<br />

the region, it is also evident that the last decade has seen an<br />

important expansion of corporate activity in this area. In 2004,<br />

I wrote that the overall picture for CSR in Latin America was<br />

one in which private sector participation, government advocacy<br />

and promotion, and general public awareness was relatively<br />

low. Private sector activity was incipient, and a number of<br />

business-industry NGOs had only recently been established to<br />

promote CSR. Of course, these results varied greatly across the<br />

region. Brazil led the Americas, attaining a level of engagement<br />

with CSR that was similar to more developed countries. The<br />

next best performers were the most industrialized countries<br />

(Argentina, Chile, and Mexico), followed by lower levels of CSR<br />

in the rest of South America, and a virtual absence of activity<br />

in the Caribbean and Central America.<br />

Almost a decade later, the picture has changed. Public and<br />

business opinion surveys, such as those conducted by CSR<br />

network Forum Empresa and by accounting firm KPMG in<br />

2011, gave insights into both the growth of CSR and its limits.<br />

Both surveys reported an increase in sustainability reporting<br />

by companies in the region: Forum Empresa witnessed an<br />

increase in sustainability reporting from 40 to 47 percent<br />

during the 2009–2011 period; while KPMG revealed that the<br />

use of reporting assurance in some countries topped that of<br />

many developed countries (e.g., Brazil 40%, Chile 37%, Mexico<br />

25%). This picture should also be regionally disaggregated.<br />

KPMG, which only included three Latin American countries<br />

in its sample, revealed significant variations in sustainability<br />

reporting (Brazil 88%, Mexico 66%, Chile 27%). The first two<br />

countries, which were also included in their 2008 survey,<br />

had shown increases of 10 and 39 percent, respectively, over<br />

the three years prior. Although CSR uptake by companies in<br />

Latin America has improved, the sub-regional discrepancies<br />

I identified in 2004 still appear to be relevant.<br />

CSR has diffused from multinationals to large domestic firms<br />

that have found CSR to be part of the modern management<br />

package needed to compete in global markets. In small and medium<br />

enterprises as well as micro-enterprises, ethical concerns<br />

tend to be intertwined with the personal values of the owner<br />

– often related to Catholic philanthropic principles – and<br />

to a personal engagement with workers and the community.<br />

Forum Empresa reports that consumers are interested in<br />

purchasing goods from responsible companies. But public<br />

opinion surveys also reveal a lack of confidence in the private<br />

sector – derived in significant part from the belief that there<br />

is poor government oversight of business activities.<br />

In many ways, the institutional framework that encourages<br />

CSR has matured. A decade ago, a large number of business<br />

and industry civil society organizations were created, often<br />

via funding from sources outside the region, such as the Inter-<br />

American Development Bank, the Netherlands Organisation<br />

for <strong>International</strong> Assistance, and corporate foundations such<br />

as AVINA and W.K. Kellogg. AVINA alone supported some 160<br />

CSR-related organizations between 1999 and 2009. Corporate<br />

membership in these organizations has skyrocketed over the<br />

last 10 years or so: Forum Empresa (region-wide) 385 to 2,643;<br />

Instituto Ethos (Brazil) 11 to 1,340; CEMEFI (Mexico) 28 to<br />

495; Acción RSE (Chile) 14 to 93. These organizations have<br />

now matured as national champions and public voices for<br />

corporate ethics and responsibility.<br />

The evolving CSR system<br />

Although corporate social responsibility is often portrayed as<br />

a voluntary initiative by businesses acting as good corporate<br />

citizens, the reality is that a business acts in the center of a<br />

system of pressures, incentives, and advocacy that involves<br />

many other actors. This is particularly true in Latin America and<br />

the Caribbean, where pressures and incentives often originate<br />

from outside the country in which the firm has its operations.<br />

I call this set of pressures and incentives that surround the firm<br />

the CSR system. It can be understood as a set of inter-linked<br />

50 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

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Agenda<br />

CSR in Latin America<br />

actors at the international, home-country (of a multinational<br />

corporation), and host-country levels. It includes international<br />

actors (multilateral organizations and transnational activist<br />

networks); home-country actors (multinational corporations’<br />

head offices, private foundations, home-country governments,<br />

and academic institutions); as well as domestic (host-country)<br />

actors (the firm implementing CSR, government, universities,<br />

business and industry CSOs, independent NGOs, academic<br />

institutions, and organized labor).<br />

Three changes to the CSR system in Latin America have become<br />

particularly evident over the last decade. First, international<br />

norms of CSR, such as those promoted by the <strong>Global</strong> <strong>Compact</strong><br />

or the <strong>Global</strong> Reporting Initiative, have become more influential<br />

and pervasive among firms. Second, home-country<br />

governments are increasingly interested in influencing the<br />

• <strong>International</strong> System. Influences from multilateral organizations<br />

continue to have an important impact on the development<br />

of CSR in the region. Norms of responsible corporate<br />

behavior, such as those associated with the <strong>Global</strong> <strong>Compact</strong>,<br />

Voluntary Principles, and <strong>Global</strong> Reporting Initiative, have<br />

become more influential among firms over the last decade.<br />

<strong>Global</strong> <strong>Compact</strong> Local Networks have been established in<br />

many Latin America countries, including Argentina, Bolivia,<br />

Brazil, Chile, Colombia, Dominican Republic, Ecuador, Mexico,<br />

Panama, Paraguay, Peru, and Uruguay. Large domestic corporations<br />

increasingly see the adoption of these norms as being asthe<br />

CSR System in Latin America<br />

Host-Country<br />

System<br />

Universities<br />

Home-Country<br />

System<br />

Business/<br />

Industry NGOs<br />

Universities<br />

Private<br />

Foundations<br />

National<br />

Government<br />

ethical behavior of their companies abroad. Third, while<br />

sympathetic business and industry NGOs remain important<br />

to public debate, the rise of contentious, globally networked<br />

NGOs has created a real watchdog capability in civil society.<br />

Multilateral<br />

Organizations<br />

Firm<br />

Implements<br />

CSR<br />

Multinational<br />

Enterprise<br />

National<br />

Government<br />

National<br />

NGOs<br />

Workers<br />

<strong>International</strong><br />

NGOs<br />

Market<br />

Financing<br />

<strong>International</strong><br />

System<br />

sociated with modern management techniques, and essential<br />

to competing with foreign firms and doing business abroad. In<br />

addition, financing for large-scale investments increasingly requires<br />

adherence to CSR norms, such as those found in the <strong>International</strong><br />

Financial Corporation’s Sustainability Framework.<br />

Multilateral development agencies and private foundations<br />

based outside the region have also been significant<br />

contributors to the development of CSR in the region. The<br />

Inter-American Development Bank and its private sector arm,<br />

the Multilateral Investment Fund, continue to fund CSR activities<br />

throughout the hemisphere. The Americas Conference<br />

on Corporate Social Responsibility (2002–present), funded<br />

by the Inter-American Development Bank, is particularly<br />

noteworthy for its ongoing contribution to CSR promotion<br />

across the region. Private foundations and home-country<br />

development agencies have also been active in establishing<br />

a network of organizations that promote CSR.<br />

• Home-Country System. In addition to the obvious impact of<br />

multinational corporations’ head offices on the adoption of<br />

CSR policies, home-country governments of these firms have<br />

also begun to play an important role. Increasingly, homecountry<br />

governments are under pressure from domestic<br />

constituencies to ensure that their companies are acting<br />

responsibly abroad. This is particularly evident in the extractive<br />

sector. In Canada, which is an important source country<br />

for foreign direct investment in mining in Latin America,<br />

domestic NGOs and their political allies have pressured the<br />

government to regulate the activities of Canadian mining<br />

firms abroad. Although this regulatory agenda was rejected<br />

by the Canadian government, it felt compelled to create an<br />

Office of the Extractive Sector CSR Counsellor, and publish<br />

a periodical CSR E-Bulletin as a way to deflect civil society<br />

criticism and encourage Canadian firms to follow sustainable<br />

and responsible practices. In this respect, home-country<br />

governments, as a result of civil society pressure, can play an<br />

active role in encouraging CSR practices in host-countries.<br />

• Host-Country System. The collection of pressures and incentives<br />

described above converge around the firm implementing<br />

CSR in the host-country system. Historically, public<br />

awareness and media engagement – and even government<br />

oversight – have been relatively weak. Business and industry<br />

NGOs promote CSR, but as a “sympathetic” civil society,<br />

their approach is one of dialogue, consensus-building, and<br />

leading by example – not pressure in its political sense. In<br />

this respect, the principal pressures on the firm stem from<br />

core stakeholder constituencies such as organized labor and<br />

local communities. Here we see a significant change over the<br />

last decade, whereby local organizations based in affected<br />

communities engage in contentious politics supported by<br />

networks of like-minded NGOs at the national and international<br />

levels. This is a fundamental change that brings<br />

contentious civil society into a watchdog role that has the<br />

potential to hold firms accountable – in a context where<br />

the reach of the state is limited. It is particularly evident in<br />

the extractive sector, where civil society mobilization across<br />

local, national, and international scales has forced firms<br />

across the industry to more seriously engage stakeholders<br />

or risk losing their social license to operate.<br />

Conclusion<br />

Over the last decade, CSR has become increasingly wellestablished<br />

in Latin America and the Caribbean. Uptake by<br />

companies has increased dramatically, as has public awareness.<br />

Although local ownership of CSR and its integration with<br />

domestic philanthropic traditions has increased dramatically<br />

over the last 10 years, the CSR system in Latin America is still<br />

distinguished by the influence of outside actors: the leading<br />

practices of multinational corporations; the role of private<br />

foundations, multilateral development agencies, and homecountry<br />

governments; as well as transnational activist networks.<br />

A decade ago, a CSR system had been established in Latin<br />

America that did an admirable job of promoting the concept,<br />

but it was poorly suited to monitoring or promoting compliance.<br />

With the passage of time, the maturation of civil society,<br />

and the development of global reporting norms, the system<br />

has improved. The development of home-government interest<br />

in promoting good business practices abroad and a contentious<br />

internationally-networked civil society suggests that the<br />

CSR system can evolve to be more effective. However, moving<br />

beyond compliance with the law remains limited due to the<br />

weak regulatory capacities of many governments and the<br />

pressing concerns of decent jobs and economic development.<br />

Prof. Paul Alexander Haslam is<br />

Director of the School of <strong>International</strong><br />

Development and <strong>Global</strong> Studies,<br />

University of Ottawa, Canada. He is<br />

currently researching the effects of CSR<br />

on local communities affected by the<br />

mining industry in Latin America.<br />

52 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

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Inside ...<br />

Agenda<br />

CSR in Latin America<br />

Latin America<br />

Should Poverty<br />

Alleviation Be Part<br />

of MultinationalS’<br />

Corporate<br />

Responsibility?<br />

By Dr. Lourdes Casanova and Anne Dumas<br />

After a gap of 20 years, Rio de Janeiro will again be hosting the<br />

United Nations Conference on Sustainable Development, also<br />

known as Rio+20. In 1992, at the Earth Summit (Eco-92), Latin<br />

America was getting out of the so-called lost decade, following<br />

the debt crisis of the 1980s. The economy was growing slowly,<br />

inflation was high, and high levels of external debt reduced<br />

investments in infrastructure. Over the last 20 years, Brazil has<br />

become the sixth largest economy in the world. Today, there is<br />

economic stability, low inflation, and almost 40 million Latin<br />

Americans have come out of poverty in the last years. Even the<br />

global financial crisis has had mild effects on the region. The<br />

private sector has emerged stronger and has played a key role<br />

in the recent Latin American success story. However, despite the<br />

growth, social problems persist. Rio+20 provides a wonderful<br />

opportunity for the private sector to showcase both its business<br />

success and efforts to alleviate poverty and promote green energy.<br />

Emerging multinationals from Latin America<br />

Emerging multinationals have grown exponentially. In the<br />

2011 <strong>Global</strong> 500 ranking of the magazine Fortune, a total of<br />

115 companies – almost one in four of the total – come from<br />

emerging countries, whereas only 47 were represented in 2005.<br />

With this emerging power comes the responsibility to contribute<br />

to be part of the solution to the world’s social challenges. The<br />

Canadian magazine Corporate Knights published the rankings of<br />

its eighth <strong>Global</strong> 100 for “a better and cleaner capitalism.” This<br />

year the ranking included three Brazilian companies: Natura<br />

Cosméticos S.A. – which was number two overall in the world<br />

– Banco Bradesco S.A. (number 61), and Petrobras (number 81).<br />

Social contributions to society have been part of the vision<br />

for many Latin American companies – some of them more<br />

than 100 years old – often due to the religious beliefs of the<br />

founders. Most recent initiatives in the region started around<br />

1997, as did Forum Empresa, an Inter-American network that<br />

includes the United States and Canada and has 3,300 affiliated<br />

companies. The World Business Council for Sustainable<br />

Development, which originated at the 1992 Rio Summit, has<br />

18 member organizations – 13 are affiliated companies from<br />

Latin America and nine are from Brazil. Some important organizations<br />

– such as Peru 2021; the Ethos Institute in Brazil<br />

with 1,477 member companies; RSE in Chile; Costa Rica’s<br />

Asociación de Empresarios para el Desarrollo; and Red Puentes,<br />

a network of Latin American NGOs – are all looking to make<br />

a contribution toward the development of their own societies<br />

and to work more closely with stakeholders. The Inter-American<br />

Development Bank has supported many of these initiatives.<br />

At the same time, Brazil has become a hotspot for social entrepreneurs,<br />

and more than half of all Brazilian companies<br />

have embraced social policies, according to the Ethos Institute.<br />

Entrepreneurs and executives alike are leaving traditional<br />

businesses and embarking on entrepreneurial projects with<br />

a social development priority. In 1995 Rodrigo Baggio created<br />

the Committee for Democracy in Information Technology with<br />

the mission of utilizing information technology as a tool for<br />

social inclusion in low-income communities. The Committee<br />

creates schools around Brazil and it has started expanding the<br />

model to other emerging countries such as India.<br />

Brazil also has tough environmental laws. The 1995 Environmental<br />

Crime Law states that Brazilian executives can be sued<br />

in court if they fail to meet a number of health, environmental,<br />

and safety standards. In 2009 Brazil approved the National<br />

Policy on Climate Change and, more recently, the Forest Code<br />

to reduce deforestation.<br />

Mexico has taken a more philanthropic view concerning the<br />

contributions of its multinationals toward the improvement<br />

of its societies. In 1988 Manuel Arango, an important business<br />

leader, created The Mexican Centre for Philanthropy with<br />

59 companies, 92 foundations, and 45 business leaders. The<br />

idea at that time was to focus not only on philanthropy but<br />

also on environmental and sustainability issues as well. Since<br />

then, the Centre’s activities have include helping companies<br />

to implement CSR policies.<br />

Latin American companies (and companies from emerging markets<br />

in general) operate in a harsh economic and social context.<br />

Despite these harsh conditions, many Latin American firms<br />

have succeeded globally with strong leadership and important<br />

homegrown capabilities such as agility in decision-making and<br />

flexibility in action. While most of these emerging-market<br />

multinationals have a social dimension as part of their DNA<br />

and engage with employees and local communities to improve<br />

their social lives (by providing housing, education, and special<br />

health benefits), an important question has arisen in recent<br />

years: Should poverty alleviation be part of the role and the<br />

social commitment of successful Latin American multinationals?<br />

Poverty alleviation in Latin America<br />

The strong economic growth in Latin America since 2002 has<br />

been very beneficial for the poor, as the size of the middle<br />

classes in the region has increased. The percentage of people<br />

living below the poverty line has decreased almost 20 percent<br />

in the last 20 years, but the level of those living below it is<br />

still 30 percent – and those living in extreme poverty account<br />

for 12.8 percent of that total. The Latin American region still<br />

has one of the highest levels of economic disparity in the<br />

world. Emerging multinationals from Latin America have<br />

thrived and want to engage in poverty alleviation programs<br />

and sustainable development. Many of the poor work in the<br />

informal economy. Employees in the informal sector have no<br />

rights and their work is part of their survival.<br />

In this context, it is important to identify channels by which<br />

private and public sector leaders can have an impact on re-<br />

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Agenda<br />

CSR in Latin America<br />

ducing poverty. In general, one can identify three channels<br />

for raising people out of poverty: enterprise, distribution, and<br />

government revenue. These channels are inter-dependent<br />

and, as shown below, each presents important challenges<br />

in ensuring that they yield the desired benefits in terms of<br />

poverty reduction.<br />

Enterprise channel: Companies create employment. A job in<br />

the formal sector is often the passport to improve the social<br />

lives of those in the community. It gives employees and their<br />

families access to health services, among other benefits, and<br />

offers training that is linked to their new jobs. At the same<br />

time, foreign (and local) direct investment increases demand<br />

for products and services from local suppliers. However, many<br />

of the foreign multinationals arrived in Latin America during<br />

the privatization program of the 1990s in the service sector.<br />

State-owned telecom, electricity, airline, and water companies<br />

changed ownership. As soon as the private, foreign, or local<br />

company took over, redundant employees were fired. Since<br />

the 1990s many of the foreign companies, in fact, destroyed<br />

more jobs than they created.<br />

Distribution channel: C. K. Prahalad, with his concept of the<br />

fortune at the bottom of the pyramid, highlighted for the first<br />

time the enormous potential of the poor as consumers. One of<br />

the unique characteristics of emerging-market multinationals<br />

is their ability to offer successful products and services to<br />

those four billion people in the world who live on less than<br />

$2 per day. Banco Bradesco launched a service in Brazil for<br />

those without bank accounts, allowing them to make financial<br />

transactions through their mobile phones. The Mexican-based<br />

mobile company América Móvil has based its success on<br />

understanding the mobile phone needs of the lower-income<br />

population. The early expansion of prepaid cards is one of the<br />

reasons for the higher mobile penetration in Latin America,<br />

with respect to other emerging markets.<br />

Government channel: Governments can act as redistributors of<br />

wealth through the distribution of tax revenues. The government<br />

revenue channel’s efficiency depends on the ability of<br />

the government to collect taxes and on how they invest them.<br />

However, global competition between different parts of the<br />

world has obliged governments to take special measures to<br />

attract foreign direct investment. To compete, different governments<br />

offer a range of perks, including free import and<br />

export of products, tax exemptions for a couple of years, and<br />

often free land. Capital is usually allowed to move freely and<br />

multinationals – local and foreign – have the ability to allocate<br />

capital efficiently and minimize their tax burdens. These<br />

mechanisms to reduce corporate taxation can be damaging<br />

to emerging markets with small tax revenue bases. The 2007<br />

Latin Economic Outlook of the OECD Development Centre<br />

states that the extreme inequality in the region could also be<br />

alleviated through the redistribution of taxes.<br />

The moral case<br />

Latin American multinationals from Mexico to Brazil feel the<br />

need to engage with their communities and societies. Thus, it is<br />

not surprising that we can find a number of local multinationals<br />

where ethical values have been integrated into business strategies.<br />

The Mexican company Bimbo is well known for its policy of<br />

avoiding layoffs, even in times of crisis, and for introducing<br />

various incentives to strengthen loyalty and build the notion<br />

of common interest among its staff.<br />

The same goes for the Brazilian cosmetic company Natura<br />

Cosméticos, an ecological brand. The company is based on an<br />

environmental concept in which its products are created through<br />

the sustainable use of natural products sourced from the Amazon<br />

rainforest by poor indigenous communities. Its business model<br />

has improved the lives of about 1.1 million Brazilian women and<br />

more than 200,000 in other countries working in direct sales.<br />

The company, which does not do animal testing, considers that<br />

responsible practices form a part of the company’s everyday<br />

operations, from production to its business relationships.<br />

The restaurant chain Astrid and Gastón represent another<br />

example of the implementation of CSR. The founders, Astrid<br />

and Gastón Acurio, see their chain of restaurants as being<br />

intimately related to the improvement of Peruvian lives. They<br />

want Peruvians to rediscover the value of their unique local<br />

agricultural products and, through them, improve the image<br />

of Peru, a country that has suffered a lot from bad press<br />

internationally. They also opened the Instituto Culinario<br />

Pachacútec, named after the shantytown where it is located.<br />

The institute accepted 30 students from 700 applicants last<br />

year. The school is free and financed by donations.<br />

The business case<br />

Many companies in the world have, at times, been accused<br />

of using social initiatives as a public relations exercise to improve<br />

their images. However, social programs do help to move<br />

companies to the next stage of success and to better integrate<br />

them with the concerns of the societies in which they operate.<br />

Quality of education is seen as one of the main challenges<br />

for Latin America to attain the next stage of development.<br />

Companies that help to improve the level of education of their<br />

employees, as well as their employability, provide long-term<br />

benefits to those who set up specific programs. For example,<br />

the biggest Brazilian private bank, Banco Itaú-Unibanco, has<br />

made education projects the priority of its social policies.<br />

Through their educational program Raizes e Asas (Roots<br />

and Wings), the bank invests $12,000 per student. The Inter-<br />

American Development Bank has launched an employability<br />

program Entra 21 with the <strong>International</strong> Youth Foundation<br />

and partners from the private sector. Enova in México designs,<br />

builds, and operates more than 42 small educational centers<br />

(Red de Innovación y Aprendizaje, Learning and Education<br />

Network) for low-income urban communities.<br />

Some companies such as the Mexican building materials company<br />

Cemex are able to address the moral concerns and help the<br />

entrepreneurship spirit of the poorest segments of the population.<br />

In 2000 Cemex launched Patrimonio Hoy (Patrimony Today).<br />

The initiative offers microcredit to help low-income families to<br />

improve their houses; Cemex employees offer free advice; and<br />

the company provides fixed-price building materials. Almost<br />

265,000 families have received a total of $135 million in loans<br />

in Mexico, Colombia, and other Latin American countries.<br />

Brazilian oil producer Petrobras has committed to a wide<br />

variety of development schemes, showing that long-term<br />

involvement in CSR can also lead to long-term benefits. The<br />

company states that they have to create a policy “which brings<br />

socio-environmental results to society, aggregating social<br />

technologies. ”Petrobras adds, “in developing countries, if we<br />

want to make a difference we must go further from what the<br />

law demands.” The company collaborates with UNICEF and<br />

22 companies in Latin America and the Caribbean to focus<br />

on children’s education. Petrobras has been a participant of<br />

the <strong>Global</strong> <strong>Compact</strong> since 2003 and is part of the Dow Jones<br />

Sustainability initiative and the Brazilian Business Council for<br />

Sustainable Development. As one of the 10 biggest companies<br />

in the world by market capitalization, Petrobras has adopted<br />

CSR as an integral part of its mission and business strategy.<br />

A “New Deal” against poverty?<br />

A number of Latin American governments have launched<br />

public policy programs to tackle poverty. These programs have<br />

also served as catalysts to involve firms from the private sector.<br />

A good example is Fome Zero (Zero Hunger), which includes<br />

various programs such as Bolsa Família (Family Allowance),<br />

which was launched in 2003 and reaches about 12.7 million<br />

families with incomes of $70 per month. Each family receives<br />

about $17 a month per child attending school. According to<br />

the World Bank, 75 percent of Brazilian families in the bottom<br />

20 percent income group are receiving Bolsa transfers. Brazil<br />

is exporting its know-how to other developing countries such<br />

as India and even New York, which copied its conditional cash<br />

transfer program. In 2010, the total budget of the program<br />

reached $6 billion. The program, the biggest of its kind in<br />

the world, also encourages the participation of civil society<br />

for monitoring and evaluating the efficiency of the programs.<br />

The private sector is also supporting this initiative. Mexico has<br />

a similar (and older) program, called Oportunidades.<br />

However, poverty reduction has not been part of the traditional<br />

commitments of multinationals to the society in which<br />

they operate. Even the <strong>Global</strong> <strong>Compact</strong> – which was created<br />

in 2000 by the United Nations and has 8,000 participating<br />

companies, unions, NGOs, and governments from all over<br />

the world – does not consider the social concerns of emerging<br />

markets such as poverty alleviation and social inclusion.<br />

Moving forward to a better society<br />

Corporate scandals in the United States and Europe and the<br />

economic crisis have put companies under increasing media<br />

scrutiny and resulted in public distrust.<br />

Various countries have widely benefited from consensus-based<br />

reform initiatives. In Europe, the 1978 Moncloa Pact was<br />

a turning-point in the history of post-Franco Spain. It was<br />

prompted by the country’s economic turmoil after the 1974<br />

oil crisis. The government, unions, political parties, businesses,<br />

and civil society came to a consensus on the way forward for<br />

the country’s transition toward democracy and prosperity.<br />

There needs to be a broad Moncloa-style consensus on the<br />

future of social responsibility in Latin America. Business and<br />

the private sector should endeavor to make growth more equitable.<br />

The need for the private and public sectors as well as<br />

civil society to work together in Latin America is more urgent<br />

than ever. The Rio+20 meeting provides an excellent occasion<br />

for this commitment for a better society.<br />

Dr. Lourdes Casanova is specialized in<br />

international business with a focus on<br />

Latin America and emerging market<br />

multinationals. She is responsible at<br />

INSEAD of the Goldman Sachs 10,000<br />

women initiative and co-leading InnovaLatino,<br />

an OECD/INSEAD research<br />

project funded by Fundación Telefónica.<br />

She is member of the task force “ICT &<br />

Innovation” for the B20 summit.<br />

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Inside ...<br />

Agenda<br />

CSR in Latin America<br />

Latin America<br />

Social Responsibility<br />

Networks in the<br />

Banana Industry<br />

By Prof. Dr. Maria Alejandra Gonzalez-Perez<br />

There is evidence that in the last two decades, international<br />

civil society has played a dynamic role in improving environmental<br />

and working conditions in regions such as Latin<br />

America. Such improvements have occurred side by side<br />

with indications that trade liberalization and the decline of<br />

the state’s regulatory role since the 1980s and the advent of<br />

globalization in the 1990s has exacerbated inequalities, social<br />

exclusion, and triggered environmental degradation. It has<br />

also provided incentives for a cost-reduction “race to the bottom,”<br />

and therefore an imbalance in trade relations. There<br />

are strong indications that these apparently contradictory<br />

phenomena (care and competition) occur simultaneously in<br />

different industries across the globe.<br />

Although corporate social responsibility practices and policies<br />

are voluntarily designed and adopted, it is in many cases<br />

compulsory due to the pressures of market forces. Social and<br />

market pressures have obliged companies to develop “socially<br />

engineered” goods and services. The production and distribution<br />

processes of these goods must be continuously improved<br />

to have a perceived positive effect on the employees, communities,<br />

and the environment. For consumers, this means<br />

having the choice of buying a product guilt-free. Making an<br />

analogy with GMOs (genetically modified organisms), these<br />

products could be termed EMOs (ethically modified organisms).<br />

However, an approach beyond CSR is required and it must be<br />

observed at the international level. The development of EMOs<br />

has been facilitated due to the increased ability of both the<br />

production systems and marketing strategists to target their<br />

brands to niche markets, in addition to activists targeting<br />

brands to apply pressure for change.<br />

Those that have denounced the negative aspects of trade liberalization<br />

and globalization have identified and stated that to<br />

redress these issues and ameliorate the harmful consequences,<br />

an accountable, transparent, participative, and transnational<br />

governance system is required. Within the specific case of<br />

the banana industry, it has been clearly observed how local<br />

socially- and environmentally-driven initiatives of producing<br />

regions in Latin America have received feedback from consumers<br />

in non-banana-producing countries. This has taken place<br />

through the establishment of social responsibility networks<br />

(SRNs), which are relationally connected to local and international<br />

actors who coordinate the adoption of social and<br />

environmental responsibilities. The nodes of the SRNs in the<br />

banana industry are multinational companies, independent<br />

producers, governments, community-based organizations,<br />

trade unions, international nongovernmental organizations,<br />

shareholders, certification agencies, consumer associations,<br />

and consumers.<br />

According to the FAO, in 2010 the world export of bananas<br />

reached almost 14 million tons. Although the largest producers<br />

of bananas are India, Brazil, and China, the main exporting<br />

countries are currently Ecuador, Colombia, Costa Rica, and<br />

the Philippines – together they account for 73 percent of the<br />

world’s banana exports.<br />

Civil society’s social responsibility within the banana industry<br />

is to foster and regulate social, economic, and political<br />

activity through non-state/non-corporate interdependent<br />

governance. In other words, it can act through monitoring<br />

agencies to encourage desirable behavior from corporations<br />

and governments, and it can regulate the interdependent relations<br />

via networks in the absence of an oversight organization.<br />

Organized international civil society – composed of local<br />

and international nongovernmental organizations – regards<br />

itself as the main alternative to regulation that operates outside<br />

the framework of the nation-state. Although currently<br />

there is not a globally defined framework that is enforceable<br />

through international legislation, international civil society<br />

organizations generally operate based on Western principles<br />

of human rights, and increasingly in accordance with the Ten<br />

Principles of the United Nations <strong>Global</strong> <strong>Compact</strong>. Within the<br />

scope of the banana industry, international NGOs operating<br />

in consumer markets have used mechanisms such as rallies,<br />

protests, marches, and campaigns through social networks,<br />

boycotts, and other public actions as catalysts for change when<br />

dialogue with decision-makers in a corporation or government<br />

has failed. These actions are usually designed strategically to<br />

gain immediate attention and to obtain short-term responses.<br />

The main mechanism is to attract mass attention or media<br />

coverage by exposing the socially unacceptable behavior of<br />

governments or corporations.<br />

Organizations at the international level that represent the<br />

interests of workers via trade unions’ representation include<br />

the <strong>International</strong> Union of Food, Agricultural, Hotel, Restaurant,<br />

Catering, Tobacco, and Allied Workers’ Association (IUF),<br />

which was founded in 1920. The position of the IUF regarding<br />

accountability and enforcement strongly suggests that the role<br />

of trade unions on the ground is critical. If trade unions have<br />

a role in the development, establishment, and monitoring of<br />

CSR programs, then CSR might be recognized as positive by<br />

trade unions. At the same time, there are other instruments<br />

such as the <strong>International</strong> Framework Agreements (IFA) to<br />

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Agenda<br />

CSR in Latin America<br />

empower local trade unions at the international level. An IFA<br />

is an accord negotiated between a multinational company<br />

and a sectoral trade union federation with regards to international<br />

activities. Within the banana industry, Chiquita Brands<br />

<strong>International</strong> was the first – and so far the only – banana<br />

company to sign an IFA with the global union IUF and the<br />

Latin America Federation of Banana Workers Union in June<br />

2001. The agreement, “Freedom of Association, Minimum<br />

Labour Standards and Employment in Latin American Banana<br />

Operations,” involved Chiquita Brands committing to the ILO<br />

conventions regarding freedom of association and collective<br />

bargaining, and also covered other issues such as forced labor,<br />

child labor, non-discrimination, and health and safety. These<br />

ILO conventions are also reflected in certifications and codes<br />

of conduct of major banana companies.<br />

Over the last two decades, several NGOs dealing with the banana<br />

industry have been created in banana-consumer countries to<br />

challenge practices in the producing countries. Some of the<br />

most active NGOs within the international banana industry<br />

are: BananaLink, BanaFair, Euroban, Rainforest Alliance, Ethical<br />

Trade Initiative, and Social Accountability <strong>International</strong>.<br />

Consumer awareness concerning the ethics of banana production<br />

and trade was raised by cases such as the second<br />

<strong>International</strong> Tribunal on Water in Amsterdam in 1992,<br />

which condemned Dole Food Company (formerly Standard<br />

Fruit Company) for seriously polluting the Atlantic region of<br />

Costa Rica through its banana operations in the Valle de la<br />

Estrella. There were legal proceedings taken by former workers<br />

against Del Monte, Dole, Chiquita, and agrochemicals firms<br />

from 1965 to 1990 for injuries sustained from direct exposure<br />

to Nemagon, a nematicide. In 2007, Chiquita pleaded guilty to<br />

the Justice Department of the United States for making extortion<br />

payments to the AUC paramilitary group in Colombia in<br />

exchange for protecting the lives of workers.<br />

ded in an SRN is that if local trust is built and maintained, it<br />

benefits them because it stabilizes relationships (and therefore<br />

controls production costs), thereby enhancing economic efficiency<br />

and improving the predictability of profits.<br />

Simultaneously, since the 1990s, there has been increased<br />

awareness of and commitments to certification schemes on the<br />

international level. Supermarkets, retailers, and other buyers<br />

increasingly consider certifications as being critical requirements<br />

for bananas and other agricultural products. The benefits as a<br />

result of the SRNs in the banana industry have been mostly in<br />

areas such as health and safety at work, trade union recognition,<br />

protection of biodiversity and water sources, and perception of<br />

safety in the producing regions. Within the areas of health and<br />

safety, the explicit benefits have been a decrease in workplace<br />

accident rates, a reduction of hazards in the workplace, a reduction<br />

in the exposure to pesticides and chemical fertilizers, and<br />

an increase in environmental awareness. Top-down influences<br />

that have affected these positive changes can be traced back to<br />

the demands of consumers put upon retailers and supermarket<br />

chains. Consumers receive real-time information from international<br />

NGOs on the conditions experienced by workers and<br />

the communities where bananas are produced. Some NGOs<br />

and trade unions participate in the design and monitoring of<br />

certification. Top managers at multinational corporations have<br />

progressively adopted objectives linked to corporate citizenship<br />

and have included key performance indicators for social and<br />

environmental functioning of their operations and strategic<br />

planning. Bottom-up initiatives can be traced to the workers.<br />

Workers have organized themselves in the banana industry,<br />

generally within trade unions, which act politically at the domestic<br />

level via community-based organizations, and political<br />

parties, in which workers and their families participate. At the<br />

local level, workers’ activism mobilizes financial, labor, and<br />

political resources in order to focus attention on areas that<br />

affect workers the most. Social foundations, which are financially<br />

supported by banana-producing companies, formulate<br />

their priorities partially based on the key needs identified by<br />

workers and their families, and allocate resources for either<br />

satisfying theses needs or mobilizing resources from national<br />

or international funding agencies.<br />

SRNs in the banana industry have influenced the improvement<br />

in perception of security in a positive way. In regions with histories<br />

of violence, such as Uraba in Colombia, several groups acted<br />

together with local and national authorities toward achieving<br />

a reduction in the violence, and developing a peace-building<br />

process in the region. Specific improvements in security as a<br />

consequence of the SRNs in Colombia were: the increase in<br />

democratic spaces for political participation, with different<br />

actors partaking in political and socioeconomic development<br />

processes within the region; increased levels of negotiations<br />

with government agencies; the intensification of dialogue; and<br />

informed communication with international actors.<br />

The dynamics of interconnecting consumers’ concerns and<br />

workers’ struggles increased the influence that could be exercised<br />

through international civil society, in the sense that<br />

workers’ voices could be echoed in market-driven ethical<br />

practices. The most significant effect it has achieved is the<br />

tacit power it has given to workers on the ground. Workers<br />

and their representatives (trade unions and community-based<br />

organizations) have gained an understanding that the circumstances,<br />

conditions, and needs have become known and heard<br />

internationally by groups of people with demonstrated commitments<br />

based on solidarity and social responsibility. This<br />

has given them not just negotiating power when bargaining<br />

working conditions, but it has also situated them in an international<br />

network, opening up new fields of activities and<br />

strategies of influence. This bottom-up phenomenon – which<br />

is based on acquired knowledge in international politics and<br />

business, and access to international social networks – serves<br />

the purpose of connecting workers and local communities to<br />

markets and international communities.<br />

Several consumer and activist groups have been created in<br />

the agricultural trade area. Fairtrade and organic production<br />

are encouraging the exercise of politics by consumers. Consumer<br />

actions in importing markets have a potential impact<br />

to address trade relations at the policy level. This would at<br />

least allow for the survival of developing countries within the<br />

competitive international market.<br />

Within the banana industry, SRN initiatives vary according to<br />

the motivations and capacities of different actors. For instance,<br />

at the local level in the banana industry, there are initiatives<br />

planned and implemented by banana-producing companies<br />

(mostly multinational companies) aimed at building trust<br />

with workers, local communities, and national governments.<br />

When local CSR efforts are connected to a wider set of domestic<br />

stakeholders, then they can be conceptualized as part of an<br />

SRN. The rationale for a banana company to become embed-<br />

Prof. Dr. Maria Alejandra Gonzalez-<br />

Perez is Full Professor, Head of<br />

Department of <strong>International</strong> Business,<br />

and Coordinator of the research<br />

group on <strong>International</strong> Studies at the<br />

Universidad EAFIT in Colombia. She<br />

is part of the network of the virtual<br />

institute of UNCTAD, member of the<br />

<strong>Global</strong> <strong>Compact</strong> Network in Colombia,<br />

and she is also a research associate at<br />

the Centre of Innovation & Structural<br />

Change (CISC) in Ireland. Prof. Dr.<br />

Gonzalez-Perez holds a PhD from the<br />

National University of Ireland, Galway.<br />

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61


Inside ...<br />

Agenda<br />

CSR in Latin America<br />

Latin America<br />

Corporate Complicity in<br />

Human Rights Abuses in<br />

Latin America<br />

Efforts to establish an agenda of corporate<br />

responsibilities with human rights in<br />

Latin America have led to modest, if not<br />

aspirational, results. However, recent<br />

developments suggest that this agenda is<br />

gradually gaining ground, as seen through<br />

its appropriation by states, companies,<br />

and civil society advocacy groups as an<br />

interpretative framework for their actions.<br />

The emerging dynamics of collaboration and<br />

conflict between such actors – within and<br />

across national borders – contribute toward<br />

defining the broad substance and scope of<br />

this emerging agenda.<br />

By Dr. Marcelo Saguier<br />

The linkages between corporations and human rights have<br />

been addressed in mainstream discussions mostly as a regulatory<br />

challenge. The so-called return of the developmental<br />

state in some Latin American countries over the last decade<br />

has expanded the scope of these linkages to incorporate the<br />

view that human rights can only be fully realized with social<br />

inclusion, social protection, and democratization. In addition<br />

to a responsible and accountable private sector, the promotion<br />

of human rights also requires the active role of the state<br />

in setting an enabling policy context, regulatory instruments,<br />

and means for participation in strategic economic sectors. In a<br />

post-neoliberal context, there is space for experimenting with<br />

innovative policy and regulatory approaches to advance the<br />

agenda of corporate accountability with human rights through<br />

more effective state-company governance arrangements and<br />

judicial practices.<br />

Moreover, the agenda of corporate responsibility with human<br />

rights in Latin America is also shaped by international<br />

normative processes, such as the UN Secretary-General Special<br />

Representative’s “Protect, Respect and Remedy” framework.<br />

This opened the discussion of what constitutes corporate complicity<br />

with human rights and how to differentiate between<br />

public and private responsibilities. Though the UN framework<br />

has still not fully entered the public debate in Latin American<br />

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Agenda<br />

CSR in Latin America<br />

societies and the mass media, it has made great progress in<br />

shaping the global debate on a norm-based corporate regulation.<br />

However, the OECD Guidelines for Multinational Enterprises<br />

have been more influential in Latin America, given that they<br />

provide an instrument of accountability that has been used<br />

by claimants seeking to redress corporate abuses.<br />

Private-led initiatives for corporate social responsibility have<br />

been another vehicle used to open up the discussion of human<br />

rights responsibility within the business community. In the<br />

late 1990s, human rights responsibilities did not feature in<br />

the agendas and language of most companies. The UN <strong>Global</strong><br />

<strong>Compact</strong> process has contributed toward mobilizing this<br />

agenda, as well as toward systematizing and consolidating the<br />

panoply of voluntary initiatives publicized as corporate social<br />

responsibility. It has recently sets itself the goal of generating<br />

the expectation that adherent companies need to publicly<br />

demonstrate compliance and transparency with the <strong>Global</strong><br />

<strong>Compact</strong> Principles. The development of a Communication<br />

on Progress mechanism and the incorporation of the <strong>Global</strong><br />

Reporting Initiative’s reporting guidelines along standardized<br />

performance indicators are steps in that direction.<br />

Notwithstanding the relative merit of such initiatives in<br />

creating conditions for greater corporate accountability with<br />

human rights, compliance remains a great challenge. Extractive<br />

industries are increasingly becoming the main source of<br />

socio-environmental conflicts throughout Latin America, as<br />

related to corporate complicity in human rights abuses. In the<br />

mining sector alone, there are presently 161 conflicts that affect<br />

212 local communities in relation to 172 mining projects<br />

and 254 companies. During 2009 anti-mining activists were<br />

tortured and assassinated in Mexico and El Salvador, allegedly<br />

with the complicity of the Canadian companies Blackfire<br />

Resources and Pacific Rim. Moreover, there are issues relating<br />

to corporate complicity in the agriculture industry such as<br />

negative health impacts, environmental damage resulting<br />

from the use of pesticides, illegal land acquisition, and forced<br />

evictions of local populations.<br />

This has led many civil society advocacy groups to engage with<br />

the corporate responsibility agenda as a means toward opening<br />

up a broader public debate about the policy, regulatory, and<br />

socioeconomic implications for human rights and development,<br />

as related to the increasing influence of transnational<br />

corporations in all spheres of society. Among the most visible<br />

initiatives, there is the regional mobilization of victims of<br />

corporate-related abuse within the organization of public<br />

opinion tribunals, such as the Permanent Peoples’ Tribunals<br />

on Neoliberal Policies and Transnational Corporations in Latin<br />

America, which were held in Peru in 2008.<br />

The field of corporate accountability with human rights is<br />

leading to the intersection of state-, company-, and civil society<br />

responses across different institutional settings in ways that<br />

suggest possibilities for constructive synergism. Transnational<br />

civil society advocates use OECD National Contact Points to<br />

bring about pressure for changes in corporate conduct regarding<br />

human rights in line with OECD Guidelines. Accountability<br />

synergism increases when states introduce policy reforms and<br />

judicial actions that support civil society initiatives in home<br />

and host countries.<br />

The company Nidera in Argentina exemplifies this. It was<br />

accused in 2011 of human rights abuses against temporary<br />

workers at its corn-processing operation facilities in Argentina.<br />

Investigative reports were commissioned by the Argentine<br />

government. The information gathered helped support legal<br />

actions in national and provincial courts and a complaint was<br />

filed by Argentine and Dutch NGOs at the Netherlands’ OECD<br />

National Contact Point. At the same time, the Argentine government<br />

promoted a change of the national legislation that<br />

regulates temporary rural employment to prevent unregistered<br />

and unprotected work. It also centralized the recruitment of<br />

rural work within the Ministry of Labor, in light of the alleged<br />

complicity of the subcontracted recruitment companies that<br />

provided services to Nidera. With such policy changes as a<br />

background, the OECD Guidelines facilitated a constructive<br />

space of negotiation between the complainant NGOs and Nidera.<br />

An agreement was reached in <strong>2012</strong>, in which Nidera committed<br />

to strengthening its human rights policy, to formalizing<br />

human rights due diligence procedures for temporary rural<br />

workers, and to allowing NGOs to monitor its operations in<br />

Argentina. Private and public engagements at the national<br />

and international levels worked as complementary leverages<br />

to increase corporate accountability.<br />

Constructive synergies of state and civil society engagements<br />

can also be seen in transnational litigation. In <strong>2012</strong> the Colombian<br />

trade union Sinaltrainal and the European Center for<br />

Constitutional and Human Rights filed criminal charges against<br />

Nestlé and members of its senior management through the<br />

Swiss public prosecution. They are accused of complicity in the<br />

murder of a trade unionist committed by paramilitary forces<br />

in Colombia in 2005. Similarly, the companies Drummond and<br />

Chiquita face trials in US courts – they were accused under<br />

the Alien Torts Claim Act for complicity in the assassinations<br />

of trade unionists in Colombia. Non-legal opinion tribunals<br />

organized by civil society groups in Latin America compiled<br />

accusatory information that later had probative value in the<br />

legal courts. In 2011 a US court accepted the compensation<br />

claim against DaimlerChrysler AG filed by torture survivors<br />

and 22 relatives of Argentinean trade unionists who disappeared<br />

during the last military dictatorship (1976–1983). The<br />

company was accused of complicity in human rights violations<br />

and state terrorism. These cases illustrate the application of<br />

an extraterritoriality principle with respect to legal corporate<br />

responsibilities with respect to human rights in overseas<br />

operations and the role of civil society advocacy in bringing<br />

these companies to justice.<br />

These are illustrative examples of the ways in which the<br />

agenda of corporate responsibility with human rights is being<br />

shaped by the intersection of public and private actors vis-à-vis<br />

instances of corporate abuse in Latin America. It suggests a<br />

growing synergy between different international instruments<br />

as well as national judicial and policy opportunities. Stimulating<br />

such synergies is one avenue toward moving ahead with<br />

the accountability agenda. Likewise, the improvement of due<br />

diligence and reporting processes – in addition to third-party<br />

monitoring – is an opportunity for the private sector to bolster<br />

the transparency and adequacy of their commitments to<br />

respect human rights. Legislative reforms that make corporate<br />

disclosure and reporting mandatory can help companies that<br />

seriously commit to genuine actions to differentiate themselves<br />

from others. The fact that actors engage with multiple<br />

institutional and normative spaces with a narrative of business<br />

complicity with human rights is a recent and promising<br />

development. These spaces open up opportunities that are<br />

valuable, but ultimately the determinant is who uses them,<br />

how, and for what purpose.<br />

Dr. Marcelo Saguier is an Associate<br />

Professor of <strong>International</strong> Relations at<br />

the School of Latin American Social<br />

Sciences (FLACSO) in Buenos Aires. He<br />

is also a Research Fellow at Argentina’s<br />

National Scientific and Technical<br />

Research Council (CONICET).<br />

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65


Inside ...<br />

Agenda<br />

CSR in Latin America<br />

Latin America<br />

The Importance<br />

of Protecting<br />

the Rainforest in<br />

South America<br />

The Amazon basin gives South America the largest contiguous block of rainforest in the<br />

world: It extends over an area of almost seven million square kilometers and is one of the<br />

largest natural carbon sinks on the planet. Experts from the World Wide Fund for Nature<br />

(WWF) estimate that over the last 50 years, nearly 20 percent of the rainforest has been<br />

destroyed through logging, natural catastrophes, and industrial exploitation. Any relaxation<br />

in forestry legislation could accelerate species extinction in Brazil even further.<br />

and fuel increases in the coming decades, so will the impact<br />

on our planet’s natural resources.” This is the reason that an<br />

important task for the future is to link the rising demand to<br />

sustainable resource management. There are three specific<br />

areas to focus on:<br />

• Agriculture<br />

• Energy production / infrastructure<br />

• Natural resources / mining<br />

Cultivation, not overcultivation<br />

According to the WWF, the current deforestation situation<br />

in the Amazon has reached a point of frightening efficiency:<br />

The machinery that has been perfected takes only a few<br />

seconds to transform a living rainforest the size of a football<br />

field into a dead wasteland. An area of rainforest the size of<br />

at least three football fields is being lost every minute. That<br />

means that in the time it has taken to read this text, at least<br />

one more football field’s worth of rainforest has disappeared.<br />

Land reclamation for agriculture is the greatest danger to<br />

South American rainforests. Driven by the growing demand,<br />

each year more areas are being turned over to agricultural<br />

use. What’s more, the global need for bioethanol has led to a<br />

sudden expansion in the areas used to cultivate soybeans and<br />

corn. Ever-larger areas of rainforest are being cleared for new<br />

pastures and grazing lands. Such global clear-cutting already<br />

makes up more than 20 percent of CO 2<br />

emissions worldwide.<br />

The WWF is confronting the problem with a dual-track strategy:<br />

Supply-chain standards have been jointly agreed with<br />

policymakers and large firms and are being implemented<br />

to the greatest extent possible. Since the main agricultural<br />

products of meat (food), soybeans (animal feed/biofuel), sugar<br />

(food/biofuel), and palm oil (diesel) are in demand worldwide,<br />

however, global standards are needed. These standards would<br />

essentially prohibit the agricultural exploitation of areas with<br />

high ecological benefit. The results have not yet put an end<br />

to such land reclamation, but they could bring it down to a<br />

significantly lower level in many countries.<br />

A living space for human beings<br />

opment, but when poorly planned, the negative impacts can<br />

exceed the short-term benefits.”<br />

This also holds true for energy production, which is becoming<br />

more and more important. Using fuels from non-fossil<br />

sources is important, but those in power must proceed with<br />

caution. For example, South American heads of government<br />

plan to set up more than 150 hydropower stations over the<br />

next 20 years, a number that many scientists believe exceeds<br />

the critical margin for many ecosystems. Since most of the<br />

power stations are located on tributaries of the Amazon, they<br />

have a substantial influence on the bisophere of the entire<br />

region. Peru’s Marañón river alone would be overloaded with<br />

81 planned projects.<br />

The future of the gold miners<br />

The subject of minerals and fossil resources has again become<br />

an important issue for environmental groups, for the additional<br />

reason that most mines belong to small-scale enterprises. If<br />

large operating companies could be held to high environmental<br />

standards in the past, it is precisely these small-scale miners<br />

who lack the money – and above all the technology – to satisfy<br />

the most minimal environmental standards. These “mini<br />

mines” also fell considerable amounts of wood, overfish, and<br />

overhunt in the surrounding environment, and dump the<br />

chemicals that accumulate from their mining activity into the<br />

surrounding waters and groundwater. Redoubling attempts at<br />

education would therefore provide a solution to this dilemma:<br />

Knowledge-transfer would increase mine operators’ awareness<br />

of the ecological problems in the region and reduce the<br />

detrimental effects on the environment.<br />

Amazon forests in danger<br />

In <strong>2012</strong> the Brazilian Parliament decided to significantly ease<br />

the laws protecting the rain forests, which have existed since<br />

1965. Massive local and international protests led to a partial<br />

veto by President Dilma Rousseff in may. She blocked 12<br />

paragraphs, but according to WWF this is far from sufficient<br />

to protect past achievements in conservation.<br />

By Dennis Lohmann<br />

In the Amazon basin alone, there are over 400 species of<br />

mammal, more than 1,200 species of bird, and some 3,000<br />

species of fish, according to WWF figures – as well as more<br />

than 40,000 proven plant varieties.<br />

At the same time, the growing economies in South America<br />

have a legitimate interest in making use of their forested areas<br />

responsibly. WWF recognizes this fact as well, as stated on<br />

the organization’s website: “As market demand for food, fiber,<br />

Forests also provide the basis for human existence: Some 30<br />

million people live in the Amazon basin alone. In the individual<br />

provinces, the highest priority is to supply the population<br />

with food, power, and daily necessities. WWF has spoken out<br />

unequivocally against such “development at all costs” and<br />

advocates designing methods of land and water transportation<br />

that are in harmony with nature. The challenge here is to<br />

increase collaboration between environmental organizations<br />

and policymakers. As WWF has stated, “transportation and<br />

infrastructure are essential for national and regional devel-<br />

Dennis Lohmann works as an editor for<br />

the macondo Media Group.<br />

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67


Inside ...<br />

Agenda<br />

CSR in Latin America<br />

Latin America<br />

Number of COPs Revised in the region (Graph 1)<br />

(by dec. 2011)<br />

The UN <strong>Global</strong> <strong>Compact</strong><br />

in Latin America – Trends<br />

and Topics<br />

7%<br />

2%<br />

4%<br />

10%<br />

3%<br />

13%<br />

2%<br />

4%<br />

18%<br />

30%<br />

2%<br />

Argentina<br />

Bolivia<br />

Chile<br />

Colombia<br />

Mexico<br />

Panama<br />

Peru<br />

Dominican Rep.<br />

5%<br />

Brazil<br />

Ecuador<br />

Paraguay<br />

Uruguay<br />

Source: Pacto Mundial. Elaboración: Centro Regional<br />

Labor standards, human rights, environmental conservation,<br />

and transparency – the core issues of the United Nations <strong>Global</strong><br />

<strong>Compact</strong> are especially vital in the developing economies.<br />

Latin America and the Caribbean are remarkable examples. “El<br />

Pacto Mundial en América Latina y el Caribe. Memorias 2011:<br />

Informe de Gestión,” a publication of the <strong>Global</strong> <strong>Compact</strong><br />

Regional Center, gives a detailed view on the present situation<br />

of the <strong>Global</strong> <strong>Compact</strong> in Latin America and the Caribbean.<br />

The whole region includes more than 1,500 companies in 13<br />

Local Networks. Thus, Latin America represents 9 percent of<br />

the whole UN <strong>Global</strong> <strong>Compact</strong>, with a 5 percent rise in the last<br />

year. After Europe it is the biggest regional network.<br />

The actual situation of companies in the region is described by<br />

the United Nations Economic Commission for Latin America<br />

this way: After the global crisis in 2008/2009, GDP grew at a<br />

significant rate of 5.9 percent in 2010. In 2011 it dropped to<br />

4.3 percent, mainly because of three factors: the reduction<br />

of global growth, measures in Brazil to reduce its internal<br />

demand, and the insecurity of the markets. Countries with<br />

the biggest economic growth were Panama, Argentina, and<br />

Ecuador; those with the smallest growth were El Salvador,<br />

Cuba, and Brazil.<br />

In <strong>2012</strong> Latin America is facing a decline in growth of approximately<br />

3.7 percent, basically because of the problems in<br />

the euro zone. Experts consider the situation in Latin America<br />

nevertheless as being robust for decent economic and social<br />

development. What made this possible? The publication<br />

“Memorias 2011” argues that the reasons are: good handling<br />

Missing Elements in<br />

the Beginner COPs (Graph 2)<br />

in %<br />

100<br />

75<br />

50<br />

25<br />

0<br />

35<br />

Letter by CEO<br />

88<br />

Evaluation of results<br />

35<br />

Human Rights<br />

Source: Pacto Mundial. Elaboración: Centro Regional<br />

Labor Standards<br />

19 15<br />

Environment<br />

of public spending, high foreign currency reserves, and low<br />

public debt as well as low external debt rates in most countries.<br />

To stimulate regional growth and human development, the<br />

United Nations Development Programme recommends the<br />

following:<br />

66<br />

Anti-Corruption<br />

• Better access to renewable energies and a global tax on<br />

transactions in foreign currencies to finance the mitigation<br />

and adaptation to climate change and to foster sustainability<br />

and equality.<br />

• Fuel consumption subsidies, which still are common in many<br />

countries of the region, favor those with the means to own<br />

an automobile, and at the same time create incentives for<br />

the excessive depletion of resources. There are countless<br />

cases where subsidies in agriculture, energy, and water are<br />

linked to environmental damage.<br />

• Some policies are conducive to meeting some targets, but<br />

result in delays of others. An example: Although the coal<br />

subsidy in developing countries promotes growth, it also<br />

contributes to increased greenhouse gas emissions. Such<br />

policies may have positive effects on global equity, but are<br />

negative for sustainability.<br />

• The situation might also be the opposite: Policies can improve<br />

sustainability, but affect equity negatively. By example, some<br />

regulations that restrict the access to goods in common use,<br />

such as forests, may help to preserve the natural resource,<br />

but deprive the poor their main sources of livelihood.<br />

The work of the <strong>Global</strong> <strong>Compact</strong><br />

With this background, and against the backdrop of a new<br />

global crisis, the <strong>Global</strong> <strong>Compact</strong> offers a strategic platform<br />

for the active involvement of companies through collaboration<br />

with its stakeholders. The initiative is seen as an effective<br />

tool for addressing the challenges of business on sustainability.<br />

However, Latin America is also the region with the highest<br />

number of delisted signatories due to failure in sending its<br />

Communications on Progress (COPs).<br />

The COPs retain the integrity of the initiative, serve as the means<br />

of communication between companies and their stakeholders,<br />

and are the main reference point of the <strong>Global</strong> <strong>Compact</strong>. In<br />

February 2011 the differentiation program entered into force<br />

as a new policy of the COP, which classifies the reports into<br />

three levels: Apprentice, Active, and Advanced. The analysis<br />

of this year’s data shows that of 435 COPs, 69 percent are at<br />

the level PM Active; 27 percent at the Apprentice level, and<br />

4 percent at the Advanced PM level.<br />

Finally, regarding the classification, the Office of the <strong>Global</strong><br />

<strong>Compact</strong> has shared the information available on the missing<br />

elements in the COP categorized Apprentice level. Graph 2<br />

shows that the biggest challenge of the COP at this learner’s<br />

level is the evaluation of results and that the subject least<br />

reported on is anti-corruption.<br />

Compilation / Translation: Dr. Elmer Lenzen<br />

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69


Best<br />

Practice<br />

74<br />

106<br />

162<br />

76<br />

108<br />

Adecco Group<br />

Air France-KLM<br />

Arab African <strong>International</strong> Bank<br />

Banco León<br />

BASF<br />

112<br />

Bayer<br />

100<br />

Bosch<br />

164<br />

Bradesco<br />

114<br />

BSH Bosch und Siemens Hausgeräte<br />

Human Rights<br />

Adecco Group<br />

Banco León<br />

EDF Group<br />

Groupe SEB<br />

Interamerican<br />

Medcom<br />

Mitsui<br />

Novo Nordisk<br />

Sakhalin Energy<br />

SK Telecom<br />

Teck<br />

Tristar<br />

100<br />

Labour Standards<br />

Bosch<br />

ManpowerGroup<br />

74<br />

Environment<br />

106<br />

Air France-KLM<br />

BASF<br />

Bayer<br />

BSH Bosch und Siemens Hausgeräte<br />

Consolidated Contractors Company<br />

Deutsche Telekom<br />

Essent<br />

Guangxi Beihai Penshibao<br />

MAN<br />

Metso<br />

MTN<br />

Vestas<br />

Development<br />

Camposol<br />

Copeinca<br />

Deutsche Post DHL<br />

Furnas<br />

GDF Suez<br />

Nestlé<br />

Netafim<br />

Rogers<br />

TÜV Rheinland<br />

CSR Management<br />

Carrefour<br />

The TMS Group<br />

Yüksel<br />

Financial Markets<br />

136<br />

156<br />

162<br />

136<br />

156<br />

116<br />

137<br />

138<br />

118<br />

78<br />

120<br />

142<br />

144<br />

122<br />

166<br />

80<br />

82<br />

124<br />

102<br />

84<br />

128<br />

86<br />

130<br />

148<br />

150<br />

88<br />

Camposol<br />

Carrefour<br />

Consolidated Contractors Company<br />

Copeinca<br />

Deutsche Post DHL<br />

Deutsche Telekom<br />

EDF Group<br />

Essent<br />

Furnas<br />

GDF Suez<br />

Guangxi Beihai Penshibao<br />

Green Delta Insurance<br />

Groupe SEB<br />

Interamerican<br />

MAN<br />

ManpowerGroup<br />

Medcom<br />

Metso<br />

Mitsui<br />

MTN<br />

Nestlé<br />

Netafim<br />

Novo Nordisk<br />

Arab African <strong>International</strong> Bank<br />

Bradesco<br />

Green Delta Insurance<br />

Royal Bank of Scotland Group<br />

152<br />

168<br />

90<br />

94<br />

96<br />

Rogers<br />

Royal Bank of Scotland Group<br />

Sakhalin Energy<br />

SK Telecom<br />

Teck<br />

158<br />

The TMS Group<br />

98<br />

Tristar<br />

154<br />

TÜV Rheinland<br />

132<br />

Vestas<br />

160<br />

Yüksel<br />

Solely responsible for the editorial contributions under the heading "Best Practice" are the companies and their authors themselves.<br />

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71


Best Practice<br />

Human Rights<br />

74<br />

76<br />

78<br />

80<br />

82<br />

84<br />

86<br />

88<br />

90<br />

94<br />

96<br />

98<br />

Adecco Group<br />

Banco León<br />

EDF Group<br />

Groupe SEB<br />

Interamerican<br />

Medcom<br />

Mitsui<br />

Novo Nordisk<br />

Sakhalin Energy<br />

SK Telecom<br />

Teck<br />

Tristar<br />

Labour Standards<br />

100<br />

102<br />

Bosch<br />

ManpowerGroup<br />

Human Rights<br />

Labour<br />

Principle 1: Businesses should support and respect the<br />

protection of internationally proclaimed human rights; and<br />

Principle 2: make sure that they are not complicit in<br />

human rights abuses.<br />

Principle 3: Businesses should uphold the freedom of association<br />

and the effective recognition of the right to collective bargaining;<br />

Principle 4: the elimination of all forms of forced and compulsory<br />

labour;<br />

Principle 5: the effective abolition of child<br />

labour; and<br />

Principle 6: the elimination of discrimination in<br />

respect of employment and occupation.<br />

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73


Best Practice<br />

Human Rights<br />

Adecco Group<br />

The REDvolución –<br />

Combating Spain´s High<br />

Unemployment<br />

By Margarita Álvarez and Lilian Furrer<br />

Adecco, the world’s leading provider of HR solutions, took unprecedented action on the<br />

streets of Spain on October 27, 2011. The aim was to use its expertise to help people unlock<br />

their potential, make a step into work, and integrate into society in an innovative and highimpact<br />

way. Driven by the belief that work is a fundamental right and a basic need, Adecco’s<br />

REDvolución initiative focused upon combating Spain’s rising unemployment and on<br />

lending a helping hand to as many people as possible. At the end of 2011, around 5.3 million<br />

people – or close to 23 percent of the working population – were out of work.<br />

The day was called a REDvolución in recognition<br />

of the “need for change.” It was<br />

made possible by the highly committed<br />

Adecco branch network in Spain, which<br />

colored the streets red at 300 “hot spots”<br />

around the country. Adecco employs<br />

1,500 colleagues, and while 400 of its<br />

staff manned the 300-branch network<br />

– assuring minimum office operations<br />

– about 1,100 colleagues took to the<br />

streets for the day while wearing their<br />

red REDvolución shirts to offer practical<br />

job-finding support to 70,000 people.<br />

Reaching out to people in need<br />

The contact activity was carefully orchestrated.<br />

Everything was geared to<br />

address some of the main challenges<br />

unemployed people face when trying<br />

to find work. A leaflet was developed<br />

with “top 10 tips” on how to prepare a<br />

curriculum vitae (CV) and how to give an<br />

effective interview. Research by Adecco<br />

shows that three out of five people do<br />

not prepare properly for a job interview<br />

and four out of five CVs are poorly structured<br />

or contain editorial errors. Armed<br />

with their leaflets and motivated by the<br />

cause, Adecco colleagues – working in<br />

twos and threes – hoisted REDvolución<br />

flags in high traffic areas. These included<br />

bus and train stations and shopping<br />

malls. Pre-briefed about how to interact<br />

with the public, at 9:00 a.m. colleagues<br />

started approaching people in the streets,<br />

enquiring if they or anyone they knew<br />

needed help in their job search. Word<br />

of mouth soon spread news of the REDvolución<br />

around the streets of Spain.<br />

People began to flow into the flagged<br />

areas. By 4:30 p.m. Adecco colleagues<br />

had completed conversations with 70,000<br />

people looking for help, and the leaflets<br />

were completely out of stock.<br />

The idea for Adecco to use its expertise<br />

in this extraordinary “out of the<br />

office” way was inspired by Adecco colleagues.<br />

Enrique Sánchez, Executive<br />

Committee Member and Regional Head<br />

Enrique Sánchez,<br />

Regional Head of Adecco<br />

Iberia & Latin America,<br />

supporting the cause.<br />

An Adecco employee in Guadalajara<br />

consulting two young people.<br />

of Adecco Iberia and Latin America –<br />

who himself joined the REDvolución<br />

– explains: “Colleagues tell us that the<br />

most motivating part of their role is<br />

helping people transition into a job and<br />

sustain their employability, unlocking<br />

their potential in a very concrete way.<br />

Our REDvolución harnessed this motivation<br />

and was a practical demonstration of<br />

social responsibility face-to-face, directly<br />

helping people who need our expertise.”<br />

From the street to the workshop<br />

But the day itself was just the starting<br />

point of follow-up support. The “top 10<br />

tips” leaflet also included an invitation to<br />

register online for a free two-hour workshop.<br />

The workshops provided an ideal<br />

opportunity for job-seekers to explore the<br />

tips in detail and apply them to their own<br />

CVs and interview techniques. The 500<br />

workshops, designed for a maximum of<br />

12 people each, took place in November<br />

and December across the nation. All were<br />

fully subscribed, adding up to a total of<br />

4,000 attendees.<br />

Feedback from people looking for<br />

work and who attended the workshops<br />

was powerful. Many people have gone<br />

on to find work. While this cannot be<br />

precisely measured – as participants are<br />

in no way tied to Adecco – appreciative<br />

comments have flooded in. One attendee,<br />

a 38-year-old woman from Castellón, took<br />

part in one of the workshops, and within<br />

one month found a job as an administrative<br />

accountant. “They gave us useful tips<br />

on how to make a job interview successful,”<br />

says the woman. “But most of all it<br />

gave me the opportunity to have a more<br />

personal contact with the Adecco team.<br />

It resulted in a personal interview with<br />

a consultant and finally in an interview<br />

with a company. Shortly after I got the job!”<br />

Making a difference<br />

Involvement in the REDvolución certainly<br />

fueled the sense of purpose Adecco<br />

colleagues have about their roles. Ana<br />

Rosa Gordo, responsible for Research and<br />

Development at Adecco, says, “I feel very<br />

proud of having participated in such an<br />

altruistic initiative, especially thinking of<br />

the tough times Spain is going through<br />

with such high unemployment. That<br />

Adecco Spain went out on the streets<br />

and contributed in this different way to<br />

a national problem – lending a helping<br />

hand – felt incredible.”<br />

Because the initiative’s purpose<br />

was to show Adecco’s corporate social<br />

responsibility, only a brief press statement<br />

was issued on the eve of October 27 to<br />

inform the broader public. However, the<br />

REDvolución captured media attention<br />

nationwide, reflecting the importance of<br />

the economic and employment issues that<br />

were addressed. Adecco Head of Marketing<br />

and Communications in Spain, Margarita<br />

Álvarez, said, “We recorded over 300<br />

items of press and broadcast coverage,<br />

acclaiming the value of the initiative.” For<br />

example, national radio station Onda Cero<br />

reported, “The Adecco team went out on<br />

the streets. Now there is no more excuse<br />

for not having an up-to-date CV or for<br />

not knowing about the most important<br />

points a CV should include. Adecco has<br />

great knowledge about the labor market<br />

and went out on the streets to clarify any<br />

doubts in relation to job-seeking.”<br />

The REDvolución continues<br />

After such a powerful initial impact, the<br />

REDvolución has continued its pace. In<br />

March <strong>2012</strong>, an Adecco REDvolución day<br />

took place in Portugal. Also in March, a<br />

REDvolución was initiated to provide<br />

personalized support to 300 families in<br />

Spain who have no member of the family<br />

in employment. Given the very high level<br />

of unemployment among young people<br />

in Spain, which is above 40 percent, an<br />

Adecco REDvolución day and follow-up<br />

workshop campaign is being planned<br />

for various university campuses in the<br />

fall <strong>2012</strong>. Expanding upon the theme<br />

of the role and importance of work as<br />

a human right, Enrique Sánchez adds,<br />

“The economic and unemployment crisis<br />

in Spain is also a social crisis, impacting<br />

individual and family life nationwide.<br />

Some groups are particularly affected –<br />

young people leaving school or university<br />

and jobseekers over 50. Having a job<br />

creates a sense of inclusion and gives a<br />

meaning to people’s lives: Work is after<br />

all the foundation of society.” Through<br />

projects such as REDvolución, Adecco<br />

is reinforcing its role in society. With<br />

around 700,000 associates who work<br />

with Adecco every day, we are living our<br />

promise of “better work better life,” supporting<br />

individual and family life and the<br />

economic success of clients and society.<br />

Work is a fundamental need and should<br />

be a basic human right for all people.<br />

More information: www.laredvolucionadecco.com<br />

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Best Practice<br />

Human Rights<br />

Banco León<br />

Cards of Hope Program<br />

our values of commitment, integrity, collaboration,<br />

and respect require us to demonstrate<br />

socially responsible behavior.”<br />

their administrative expenses, and provides<br />

artistic and recreational activities<br />

for participating children.<br />

them we can change the social reality of<br />

these children and give them a chance,<br />

the hope of a different life.”<br />

By Zoila Bello<br />

As a participant in the <strong>Global</strong> <strong>Compact</strong> initiative since 2006, Banco León has been promoting<br />

the Ten Principles of this network through its management. Respecting the protection of<br />

internationally recognized human rights within its sphere of influence and promoting the<br />

effective abolition of child labor are two of the Principles that Banco León has been supporting.<br />

This has been done through its Cards of Hope program and its approaches to education as well<br />

as to children living in poverty and with social risk in the Dominican Republic.<br />

Within the framework of its principles<br />

and values, Banco León has approached<br />

various segments of the community in a<br />

consistent and systematic way through<br />

corporate social responsibility programs<br />

that are specifically targeted toward<br />

education and children living in conditions<br />

of poverty and social risk in the<br />

country.<br />

“Banco León has always had a clear awareness<br />

of its responsibility to its staff, customers<br />

and communities, which goes<br />

beyond the provision of financial services,”<br />

says Jose Enrique Sanoja, Vice<br />

President of Corporate Relations and<br />

Marketing. “It’s about making the lives<br />

of others simpler by transforming their<br />

social reality.<br />

Our vision calls upon us to expand our<br />

legacy of success in business, which involves<br />

educating and training our employees,<br />

customers, and communities.<br />

Our principles of cultivating win-win<br />

relationships, acting ethically, and working<br />

for a better nation are clear expressions<br />

that our actions must be linked to<br />

the search for the common good. And<br />

Banco León understands social responsibility<br />

as “a form of committed and<br />

assumed generosity to be given to others<br />

through training, experience, work, and<br />

enthusiasm in search of the common<br />

good and the satisfaction of influencing<br />

positively by example. That is, to work<br />

for a better nation,” says Sanoja.<br />

There is always hope at Banco León<br />

Cards of Hope, instituted as a CSR program<br />

in 2004, is an initiative that seeks<br />

to improve and expand the educational<br />

programs of the participating entities so<br />

that more children can benefit and be<br />

cared for. It provides a fundraising tool<br />

for the sustainability of institutions and<br />

The program is intended for nonprofit,<br />

nongovernmental entities working to<br />

benefit children in conditions of poverty<br />

and living with social risk in the<br />

Dominican Republic. It is aimed at children<br />

between 6 and 12 years of age who<br />

belong to those institutions.<br />

“During the implementation of the program,”<br />

Sanoja adds, “the children participate<br />

in painting workshops, where<br />

they are motivated to draw about two<br />

main topics: mothers and Christmas.<br />

These works are then evaluated by a jury<br />

made up of bank executives and national<br />

plastic artists. Ten or 15 winning works<br />

are selected to become greeting cards for<br />

Mother’s Day and Christmas, and with<br />

THE SITUATION OF EDUCATION IN THE<br />

DOMINICAN REPUBLIC AT A GLANCE<br />

• The Dominican Republic has a total population of 10,010,590, of which<br />

3,034,997 are children and young people from 5 to 19 years of age; that is,<br />

approximately 30 per cent of the Dominican population is of school age.<br />

• 20.1 percent of children from 10 to 14 years of age are working and 37<br />

percent of them do not attend school.<br />

• The Dominican school-aged population that cannot read or write is attributed<br />

to various causes: having to drop out of school to work and earn money; in<br />

other cases there was no school in their locality, or the school was very far<br />

away. Also, the lack of classroom space prevents children and youth from<br />

attending school.<br />

• During the 2009–2010 period, the Dominican Republic had 11,402 schools,<br />

10.6 percent fewer than in 2007–2008.<br />

• Of these schools, 6,932 are public, 37 percent fewer than in 2008, and 4,178<br />

are private, 190 percent more than in 2008.<br />

• Private education in the Dominican Republic is expensive.<br />

• Twelve percent of the total school-aged population is not enrolled.<br />

• In 2010, there were 1,731 minors arrested for offences such as theft, robbery,<br />

fighting, aggression, drugs, homicide, and rape, among others.<br />

Source: National Office of Statistics (ONE). www.one.gob.do/index.php.<br />

During the nine years of its implementation,<br />

the Cards of Hope program has<br />

achieved the following results:<br />

• Five to 12 institutions participate every<br />

year.<br />

• 150,000 children have benefited.<br />

• 2,130 paintings have been made by<br />

participating children who live in<br />

conditions of poverty and are at social<br />

risk.<br />

• 195,000 cards have been printed.<br />

• More than $250,000 have been raised<br />

for participating institutions.<br />

Fe y Alegría and the cards of hope<br />

program<br />

Ana Divi Arbaje, Communications Director<br />

of Fe y Alegría, one of the institutions<br />

that has participated in the Cards<br />

of Hope program, says: “The Cards of<br />

Hope program of Banco León connects<br />

us with other institutions. It is a way to<br />

know each other and to obtain alliances<br />

in favor of all.”<br />

Through Cards of Hope, in 2011 Fe y<br />

Alegría was able to train 45 teachers<br />

from the southern area of the Dominican<br />

Republic, strengthening the subject areas<br />

of Spanish and mathematics. Acción<br />

Callejera, another recipient institution,<br />

reinforced the afterschool programs in<br />

10 communities in Santiago, Dominican<br />

Republic, where 1,820 children received<br />

comprehensive education along with<br />

their families.<br />

Other institutions allocated funds to<br />

cover transportation costs, administrative<br />

services, payment to teachers, special<br />

language and music programs, and the<br />

purchase of instruments and educational<br />

tools.<br />

Other programs such as Creemos, Sonrisas<br />

de Reyes and Ecoactivo are being<br />

developed at Banco León based on the<br />

pillars of education and childhood.<br />

76 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

77


Best Practice<br />

Human Rights<br />

EDF Group<br />

Fighting Fuel Poverty –<br />

Supporting Our Most<br />

Vulnerable Customers<br />

heating or lighting, making them even<br />

more difficult to spot.<br />

Because electricity is a basic need,<br />

EDF drew up a Group position at the<br />

end of 2011. Its goal is to prevent its<br />

customers from experiencing difficulties<br />

and to help solve the difficulties of<br />

those who do.<br />

Fuel poverty is a growing problem throughout Europe. As it varies widely from one country<br />

to another, each country has its own definition specific to its context and history. Electricity<br />

companies are involving themselves in public schemes in compliance with regulatory<br />

requirements and in action taken on their own initiative.<br />

A regulatory framework forming<br />

a commitment<br />

In France, the public service contract with the state sets out most of the action<br />

taken by EDF under regulatory schemes. EDF supports the French social tariff<br />

(“Tarif de Première Nécessité”) introduced by the public authorities in 2004.<br />

The tariff reduces electricity bills by an average of €95 a year. The number of<br />

households eligible is about 1.3 million.<br />

This social tariff makes it possible to identify the most vulnerable households<br />

early on and then offer tailored assistance to help them manage their energy<br />

consumption. Customers in difficulty may also request assistance from the<br />

housing solidarity fund (Fonds Solidarité pour le Logement), which gives them<br />

access to housing, enables them to remain in it, and also helps them to settle<br />

their unpaid bills. EDF, which set its contribution at €22 million a year, is the<br />

second-largest contributor after the local authorities.<br />

In the United Kingdom the new British regulations took inspiration from the<br />

proactive programs undertaken by EDF Energy over the past several years (the<br />

Energy Assist tariff as well as the Energy Trust Fund, in operation since 2003<br />

and which has helped more than 20,000 households heavily in debt or on low<br />

incomes).<br />

With the Warm Home Discount system introduced in April 2011, the regulations<br />

have become more binding and now require electricity suppliers to give<br />

discounts to their fuel-poor customers. Suppliers with over 250,000 customers<br />

are now to spend an aggregate amount of £250 million in 2011 - <strong>2012</strong>.<br />

In France, 8.2 million people – representing<br />

some 3.6 million households and<br />

13.5 percent of the population – live<br />

below the poverty line and are more<br />

particularly affected by fuel poverty.<br />

Another statistic provided by the French<br />

statistics institute INSEE shows that 3.5<br />

million households report that their<br />

homes are inadequately heated. In the<br />

United Kingdom, the number of households<br />

in fuel poverty was estimated at<br />

5.5 million – 21 percent of the population<br />

– at the end of 2009. In connection<br />

with the publication of his report in<br />

March <strong>2012</strong>, John Hills specifies that<br />

nearly 8 million people – or 2.7 million<br />

households on low incomes – face<br />

higher energy costs than middle and<br />

high-income households (with an aggregate<br />

fuel poverty gap of £1.1 billion,<br />

projected at £1.6 billion in 2016, as a<br />

result of the poor housing conditions<br />

in particular).<br />

Since fuel poverty is not necessarily<br />

synonymous with poverty per se or<br />

with unpaid energy bills, it is difficult<br />

to identify those affected; but it is necessary<br />

to do so if action is to be taken.<br />

Meanwhile, more and more people are<br />

deliberately depriving themselves of<br />

“As a responsible energy company, we make a<br />

commitment to supporting our most vulnerable<br />

residential customers. We work with<br />

governments, local authorities, NGOs, and other<br />

stakeholders to promote the most efficient use<br />

of energy in order to reduce consumer costs.<br />

With our partners, we also develop countryspecific<br />

solutions and programs to support<br />

vulnerable households."<br />

Improving housing and social<br />

mediation<br />

Aside from regulatory frameworks and<br />

new advisory services such as Accompagnement<br />

énergie (energy support),<br />

which was launched in 2011 to provide<br />

advice on such matters as tariffs, energy<br />

management, and more flexible payment<br />

schedules, EDF is building partnerships<br />

in accordance with its sustainable development<br />

policy to fight fuel poverty in<br />

two ways. The first is to improve the energy<br />

efficiency of housing. Poor housing<br />

conditions trap vulnerable households<br />

in a vicious circle.<br />

In France, EDF has undertaken to<br />

provide €49 million for the “Habiter<br />

Mieux” (Live Better) program between<br />

2011 and 2013. This public program will<br />

thermally renovate the 58,000 housing<br />

units belonging to fuel-poor homeowners.<br />

This commitment further supports<br />

the voluntary action taken by EDF, and in<br />

particular its “2000 toits, 2000 familles”<br />

(2,000 roofs, 2,000 families) operation<br />

carried out by the Fondation Abbé Pierre,<br />

which builds energy-efficient social housing<br />

for disadvantaged people (for 2,025<br />

families at the end of 2011). Other activities<br />

are carried out in conjunction<br />

with social housing authorities (about<br />

100,000 housing units in 2011).<br />

Meanwhile, EDF Energy has been<br />

working for 10 years with the London<br />

city authorities on the London Warm<br />

Zone program, which identifies the most<br />

vulnerable households and invests in<br />

energy efficiency improvements. The<br />

result: 57,000 housing units have been<br />

insulated since the beginning of the<br />

operation. In addition, EDF Energy is<br />

continuing its financial contribution,<br />

over a period of three years, to the government’s<br />

Community Energy Saving<br />

Programme (CESP) aimed at improving<br />

the insulation of housing in disadvantaged<br />

neighborhoods (involving more<br />

than 100,000 housing units).<br />

The second way in which EDF is<br />

fighting fuel poverty is by forging partnerships<br />

with social mediation structures.<br />

Without such structures, it is indeed difficult<br />

to reach out to people in difficulty<br />

and explain to them how they can obtain<br />

the assistance for which they are eligible<br />

and receive personalized advice about<br />

ways to reduce their energy consumption.<br />

By the end of 2011, EDF had set<br />

up such partnerships with nearly 200<br />

outreach and contact points in France.<br />

It further strengthened its partnerships<br />

with the social support community in<br />

2011 by renewing its agreement with<br />

the national union of local social action<br />

centers to step up its activities carried<br />

out with social workers. It also offered<br />

support by continuing with many other<br />

nationwide partnerships like the “Unis<br />

In France, EDF is working with NGOs<br />

such as "Le Secours catholique" to<br />

provide vulnerable customers advice<br />

on energy efficiency and help them to<br />

reduce their bills.<br />

Cités Médiaterre” program, under which<br />

young people doing civilian service reach<br />

out to residents of underprivileged neighborhoods<br />

and help them modify their<br />

energy consumption.<br />

In Hungary, EDF DÉMÁSZ began<br />

in February <strong>2012</strong> to support an unpaid<br />

bills management program initiated by<br />

the Hungarian branch of the Order of<br />

Malta, providing funding of 100 million<br />

forints (about €336,000). Those eligible are<br />

customers that meet a number of social<br />

criteria as well as families whose electricity<br />

has been or is set to be cut off due to<br />

non-payment of bills. They receive support<br />

in managing their energy consumption.<br />

In Poland, Group companies generate<br />

electricity but do not sell it to<br />

individual customers. However, they<br />

too have made a commitment to fight<br />

fuel poverty via partnerships in a country<br />

where more than 13 percent of the<br />

population lives below the poverty line.<br />

For example, EC Krakow offers heat to<br />

NGOs helping the poor, and helps the<br />

underprivileged via its Gorace Serce<br />

company foundation.<br />

78 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

79


Best Practice<br />

Human Rights<br />

GroupE SEB<br />

self-assessment<br />

on Human Rights<br />

By Joël Tronchon<br />

Having become a participant of the UN <strong>Global</strong> <strong>Compact</strong> in 2003, Groupe SEB is committed<br />

to respecting the Ten Principles of the agreement. For the Group, which has a presence in<br />

several continents, including Asia, it was necessary to find a tool capable of transforming<br />

this commitment in principle into a concrete reality. This would enable an evaluation of the<br />

manner in which these Principles were taken into account locally in each of the Group’s<br />

subsidiaries. Accordingly, in 2007 the Group adopted the HRCA Quick Check (Human Rights<br />

Compliance Assessment) – a self-assessment tool developed by the Danish Institute for<br />

Human Rights and supported by the United Nations.<br />

In a wider context, Groupe SEB has<br />

initiated the creation of a global Ethical<br />

Code, which will be distributed in<br />

<strong>2012</strong> to all of its employees. Based on<br />

the Group’s values, this will specify the<br />

main rules of conduct for employees and<br />

will address 18 key themes – from the<br />

respect for Human Rights to measures<br />

for combating corruption – and including<br />

non-discrimination, environmental<br />

protection, and the prevention of conflicts<br />

of interest.<br />

Adaptation to the Chinese context<br />

In late 2010, the five sites of Supor – the<br />

Groupe SEB subsidiary based in China<br />

and Vietnam – underwent a self-evaluation<br />

using the China Business and Social<br />

Sustainability Check (CBSSC). This tool<br />

is a version of the HRCA Quick Check<br />

adapted to the Chinese context by the<br />

Danish Institute for Human Rights, and<br />

produced in both English and Chinese.<br />

Twenty-eight questions based around<br />

245 indicators examine themes ranging<br />

from working conditions (overtime,<br />

salaries, holiday, minimum age, training,<br />

equality of treatment, safety, etc.) to the<br />

impact on local communities and supplier<br />

monitoring.<br />

The questions are generally similar to<br />

those set in the HRCA Quick Check, but<br />

they are more specific and take into account<br />

certain local particularities, for<br />

example the special attention given to<br />

nondiscrimination against migrant workers<br />

and to the accommodations offered to<br />

workers. The self-evaluation produced 7<br />

“red” and 36 “yellow” responses, relating<br />

particularly to working hours, health and<br />

safety, holidays, and supplier monitoring.<br />

Action plans are being implemented<br />

and a new check will be carried out in<br />

two years.<br />

In total, at the end of 2011, 99 percent<br />

of the Group's personnel were covered<br />

by the HRCA Quick Check or its Chinese<br />

equivalent, the CBSSC.<br />

What is the HRCA Quick Check?<br />

Available online, it consists of indicators<br />

developed on the basis of the Universal<br />

Declaration of Human Rights – the 1966<br />

<strong>International</strong> Covenant on Civil and Political<br />

Rights and around 80 other major international<br />

treaties and conventions. The tool<br />

comprises 28 questions based around 240<br />

indicators aimed at determining whether<br />

the company has Human Rights policies<br />

or guidelines and whether these are correctly<br />

applied through the company’s<br />

procedures and practices. Naturally, the<br />

HRCA Quick Check covers Principles 1<br />

and 2 of the <strong>Global</strong> <strong>Compact</strong> concerning<br />

Human Rights, but it also monitors compliance<br />

with labor standards (Principles<br />

3, 4, 5, and 6) together with measures to<br />

combat corruption (Principle 10).<br />

Management and deployment<br />

Groupe SEB was one of the very first<br />

French companies to implement the<br />

HRCA Quick Check. It is managed by<br />

the Sustainable Development Department,<br />

with the aim being that each<br />

entity – whether industrial, logistical,<br />

or tertiary – should carry out a selfevaluation<br />

on average every two years,<br />

in a logical progression. The answers<br />

to the questions are classified into four<br />

levels: red (immediate action required),<br />

yellow (issue being addressed), green<br />

(site complies), and gray (unknown/not<br />

applicable). The Sustainable Development<br />

Department examines the results<br />

in conjunction with the site concerned.<br />

In late 2009, the HRCA Quick Check was<br />

deployed across all of the Group’s entities<br />

in the world with more than 10 staff,<br />

thereby covering 95 percent of personnel,<br />

excluding Supor, the Chinese subsidiary<br />

integrated into the Group in 2007. This<br />

first wave of self-evaluations produced<br />

10 “reds” and 60 “yellows” in the more<br />

than 1,500 responses. Most of these were<br />

linked to relationships with suppliers,<br />

and particularly to the absence of explicit<br />

references in contracts to compliance with<br />

Human Rights principles. The Sustainable<br />

Development Department established corrective<br />

action plans from the points raised.<br />

A second wave was organized in 2011<br />

in which 70 sites were involved. The<br />

questionnaires were completed jointly by<br />

the sites’ Directors and the local Human<br />

Resources Managers. This second deployment<br />

produced a single red response, and<br />

nearly 150 yellow responses, demonstrating<br />

once again that respondents were<br />

keen to point out areas for improvement.<br />

A global action plan<br />

Among the areas for improvement addressed<br />

during the last deployment of<br />

the HRCA Quick Check, the monitoring<br />

of suppliers was the most problematic<br />

for the majority of sites. Confronted with<br />

this observation, new corrective measures<br />

have been taken by Groupe SEB’s Purchasing<br />

Division. A Responsible Purchasing<br />

Charter will be finalized in <strong>2012</strong> and sent<br />

to all of the Group’s suppliers. In particular,<br />

it will include the Ten Principles<br />

of the <strong>Global</strong> <strong>Compact</strong> and will collect<br />

the different social and environmental<br />

requirements, which are currently contained<br />

in different documents. Similarly,<br />

social and environmental audits will<br />

be outsourced in the future on a global<br />

basis, and targeting will be conducted<br />

by means of a supplier marking system.<br />

Human Rights:<br />

Supor’s action<br />

plans<br />

“In 2011, all of Supor’s entities<br />

in China and Vietnam have<br />

evaluated their practices in terms<br />

of Human Rights by answering<br />

the questions of the CBSSC.<br />

They have done this with sincerity<br />

and honesty, without concealing<br />

weak points. These weak points<br />

related in particular to the<br />

duration of work, to holidays, and<br />

to certain aspects of health and<br />

safety. All have been the subject<br />

of corrective action plans which<br />

I supervise with the Industrial<br />

Director. For example, it has been<br />

decided to progressively reduce<br />

the maximum duration of weekly<br />

work, and to ensure compliance<br />

with mandatory rest days. The<br />

CBSSC is a tool that helps us<br />

to progress: We will carry out<br />

another check in two years.”<br />

Oliver Dong,<br />

Human Resources Director at Supor<br />

80 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

81


Best Practice<br />

Human Rights<br />

Interamerican<br />

“Actions of Life” –<br />

Actions of Responsibility<br />

for Society<br />

By Yiannis Roundos<br />

Contributing to society with social responsibility initiatives and actions constitutes a core<br />

element of INTERAMERICAN’s mission. For this reason, the company invests significant<br />

amounts of time into various social actions, above and beyond the responsible practices that<br />

it has integrated into activities of its business operations. From its inception until today, it<br />

has continually focused on the people and society in general.<br />

ity seeks medical care as a last resort.<br />

It should be noted that the Roma have<br />

no social security coverage for healthcare<br />

because they are not registered as citizens.<br />

Preschooler school-readiness test<br />

The Open Embrace association of Friends<br />

of Social Pediatrics and Medicine organized<br />

a model school readiness test<br />

program for children of preschool age<br />

and implemented it in <strong>2012</strong> for a third<br />

consecutive year, with the sponsorship<br />

of INTERAMERICAN. The program consists<br />

of pre-symptomatic testing for the<br />

early identification of health problems<br />

preschoolers may face before entering<br />

primary education. It was organized<br />

under the auspices of the Ministry of<br />

Education and the Ministry of Health and<br />

was prepared by the University group of<br />

the 2nd Pediatric Clinic of the University<br />

of Athens.<br />

In 2011, INTERAMERICAN continued to<br />

implement its far-reaching and ambitious<br />

program of social responsibility initiatives,<br />

which it has been developing since<br />

2004 under the title “Actions of Life.” The<br />

“Actions of Life” program is based on two<br />

defining parameters:<br />

• the relevance of the actions to the company’s<br />

business activities, with the use<br />

of its services systems and know-how<br />

in actions that contribute to society;<br />

• the participation of its workforce, with<br />

the effective sensitization and voluntary<br />

contribution to society by its employees,<br />

which underscores the company’s idea:<br />

“INTERAMERICAN is its people.”<br />

Structure<br />

The “Actions of Life” program is structured<br />

around the following thematic axes:<br />

• health care<br />

• risk prevention (road safety issues and<br />

risks from natural phenomena)<br />

• support for vulnerable social groups<br />

• environmental protection<br />

• culture, education, and sports<br />

In spite of the adverse financial circumstances<br />

over the last two years, which<br />

have also had a significant impact on<br />

the private insurance sector, in 2011<br />

INTERAMERICAN not only maintained<br />

but actually strengthened the “Actions of<br />

Life” program, proving its interest in dealing<br />

with the problems of Greek society.<br />

Focusing on children’s needs and<br />

their rights<br />

The primary healthcare and health education<br />

provision program for Roma children<br />

in Attica, organized by Medecins<br />

du Monde (MdM) with the support of<br />

INTERAMERICAN, was completed and its<br />

objective was fully achieved. The program<br />

was held from October 2009 to October<br />

2010 at reservations in Elefsina, Aspropyrgos,<br />

and Nea Zoi.<br />

The program covered the actions of the<br />

MdM mobile unit at the aforementioned<br />

reservations, which included: the provision<br />

of primary healthcare; treatment<br />

and pharmaceutical coverage; preventive<br />

medical care and provision of information<br />

on the importance of health care;<br />

referral of cases for further medical care<br />

and social support; where necessary, recording<br />

of health data of children for<br />

medical and epidemiological research; as<br />

well as inoculation. In total, 780 inoculations<br />

were performed and 552 Roma<br />

children were examined, while 145 new<br />

health booklets were issued. The pediatricians<br />

and health visitors of the MdM<br />

mobile unit also provided education and<br />

training on essential health issues, while<br />

the necessary health certificates were<br />

issued to the pupils of the 7th Primary<br />

School of Aspropyrgos, the majority of<br />

whom are Roma. Statistically, approximately<br />

two out of three children that<br />

received care were under five years of age.<br />

The Roma: A population with a high<br />

level of exposure to health risks<br />

Roma children run the greatest risk of<br />

suffering from tuberculosis, malnutrition,<br />

accidents, and dental problems and are<br />

less likely to develop immunities. They<br />

are a recognized high-risk group for iron<br />

deficiency anemia and food poisoning<br />

and their emergency hospitalization rate<br />

is constantly increasing, since this minor-<br />

Sponsoring children of ActionAid<br />

In 2011 INTERAMERICAN continued to<br />

provide support to ActionAid for the<br />

“Sponsor a Child” program, increasing its<br />

sponsorships of children to 67, compared<br />

to 55 in 2010, and 40 in 2009.<br />

With this program, ActionAid – an international<br />

organization active in more<br />

than 50 countries – focuses on creating<br />

the basic infrastructure in order to secure<br />

food, drinking water, and education for<br />

children in the poorest regions of Africa,<br />

Asia, and Latin America. This costs less<br />

than €1 per child per day.<br />

Working with UNICEF for children’s<br />

rights<br />

INTERAMERICAN works closely with<br />

UNICEF and has supported and participated<br />

in the organization’s initiatives in<br />

Greece since 2008 within the framework of<br />

“Actions of Life” – INTERAMERICAN’s corporate<br />

social responsibility program. For<br />

the third year in a row, INTERAMERICAN<br />

has supported the Intercultural Festival<br />

organized every December by UNICEF<br />

Greece. The company provides free insurance<br />

coverage at the visual arts exhibition<br />

“Resist,” organized by UNICEF and the<br />

Municipality of Athens in Technopolis<br />

in support of UNICEF’s goals.<br />

With this event, UNICEF aims to highlight<br />

the message that every child has the<br />

right to survival, education, growth, and<br />

protection from abandonment, abuse,<br />

and exploitation. The event gathered approximately<br />

500 children from indigent<br />

families, immigrant families, institutions,<br />

and other disadvantaged groups.<br />

Furthermore, UNICEF is attempting to<br />

minimize the consequences of the crisis<br />

for the children in the Horn of Africa.<br />

INTERAMERICAN responded to the global<br />

organization’s appeal for help.<br />

Support to The Smile of the Child<br />

In 2011 INTERAMERICAN continued<br />

its support for The Smile of the Child<br />

association. The company renewed the<br />

insurance policies under which it insures<br />

the association’s vehicles for free while<br />

also insuring new vehicles.<br />

Why<br />

INTERAMERICAN<br />

supports<br />

"Sponsor a Child"<br />

The company participates in<br />

the “Sponsor a Child” program<br />

because with its contribution:<br />

• it fulfills its commitment as a<br />

participant to the United Nations<br />

<strong>Global</strong> <strong>Compact</strong> to support<br />

children’s rights, thereby confirming<br />

its mission as an insurance<br />

organization to improve the quality<br />

of life of as many children as<br />

possible;<br />

• it increases awareness among<br />

the company executives, who are<br />

motivated to make the necessary<br />

budget provisions in order to<br />

participate in the program; it also<br />

communicates the idea of social<br />

responsibility to the employees.<br />

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83


Best Practice<br />

Human Rights<br />

Medcom<br />

The Children First<br />

By Lilinés Urriola Herrera<br />

In the past year, Panama has made some important and positive headlines worldwide. The<br />

country was awarded an investment grade credit rating by both of the globally renown ratings<br />

agencies, Fitch Ratings and Standard and Poor’s. Also, the New York Times named Panama as<br />

the number one travel destination in <strong>2012</strong>. The country also had economic growth of 8 percent<br />

from 2006 to 2010, and in 2011 the country’s economy grew 10.6 percent, making it one of the<br />

fastest-growing economies in Latin America.<br />

Despite all the good news the world is<br />

reading about Panama, the isthmus is<br />

currently encountering a series of severe<br />

problems regarding malnutrition<br />

and extreme poverty. The number of<br />

Panamanian children suffering from<br />

low birth weight and stunted growth<br />

surpasses the numbers of most of the<br />

poorest countries in Central America.<br />

Figures depicting chronic malnutrition<br />

reach 62.0 percent in indigenous communities<br />

and 10.5 percent for children<br />

in urban areas. The infant mortality rate<br />

is 1.3 percent, according to the country´s<br />

National Institute of Statistics and Census.<br />

According to the United Nations<br />

Economic Commission for Latin America<br />

and the Caribbean, Panama is also facing<br />

an economic inequality problem.<br />

In 1996, RPC Television, a television network<br />

owned by Corporación Medcom,<br />

proposed the project “Los Niños Primero”<br />

(The Children First) to Nutre Hogar, a<br />

nongovernmental organization that has<br />

been helping with assistance, recovery,<br />

and prevention of child malnutrition<br />

since 1988. Nutre Hogar was founded by<br />

Monsignor Romulo Emiliani, who had<br />

also founded various apostolates and<br />

social projects that still benefit the children<br />

of Panama. His seal of approval gave<br />

confidence to the people regarding these<br />

types of projects. The main idea of the<br />

project was to help an NGO that involved<br />

civil society with the economic support<br />

of two of the corporation’s clients as<br />

sponsors (Petróleos DELTA and Super 99).<br />

Our medium created a triangular alliance<br />

with sponsors to accomplish the project,<br />

which focused primarily on creating a<br />

public awareness campaign about child<br />

malnutrition in Panama, along with<br />

national food drives. Corporación Medcom<br />

offered its multimedia platform to<br />

assist in the spread of publicity for the<br />

campaign at no cost by donating its main<br />

product, which is airtime. In 2011, our<br />

corporation donated $348,676 in free<br />

airtime in addition to volunteer time<br />

from our media teams to produce news<br />

coverage, radio and television interviews,<br />

reports, and live feeds to promote the<br />

campaign. The corporation also coordinates<br />

monetary donations made by<br />

the two sponsors – the donations are<br />

targeted solely for the construction of<br />

new recovery centers. Our corporation<br />

offers sponsors a competitive marketing<br />

plan that includes news coverage as<br />

well as reports about and promotion of<br />

their brands and products in exchange<br />

for donations for Nutre Hogar. In 2011<br />

the commercial packages ran for a net<br />

investment of $18,000, which returned<br />

$78,771 in total airtime to each sponsor.<br />

The campaign and food drives are supported<br />

by more than 2,000 volunteers,<br />

who offer their time every year to make<br />

this the most important campaign and<br />

food drive in the country. The first campaign<br />

was created to build a recovery<br />

center for malnourished children in<br />

Los Valles de Cañazas in the Veraguas<br />

province. The success measures for this<br />

first project were not only the amounts<br />

of money or donations that were to<br />

be received for the construction and<br />

maintenance of the center, but also the<br />

way in which the center would become<br />

entirely self-sustainable. It is important<br />

to mention that each of the centers is<br />

self-sustainable and is, in fact, managed<br />

by all the members of the community<br />

with the help of Nutre Hogar.<br />

Los Valles de Cañazas was the first community<br />

to receive a recovery center, due<br />

to the severe child malnutrition and<br />

extreme poverty rates in that area. Despite<br />

all this, the community was wellorganized<br />

and had previously made a<br />

formal request for help to Nutre Hogar.<br />

This happened before RPC Television<br />

proposed the project to all the parties<br />

involved. The community in El Valle<br />

de Cañazas not only benefitted from<br />

the construction of the center, but due<br />

to the exposure they received through<br />

our media platform, they were able to<br />

improve their infrastructure with new<br />

streets and highways. It used to take<br />

about two hours to get to Cañazas from<br />

the closest city – today it takes about<br />

30 minutes.<br />

In <strong>2012</strong> the project “The Children First”<br />

marked 16 years of uninterrupted success.<br />

Thanks to the annual food drives<br />

and donations, it has built 8 community<br />

centers and 42 sub-centers nationwide.<br />

The food collected in the drives serves<br />

as back-up to feed all the centers and<br />

sub-centers nationwide. Corporación<br />

Medcom’s efforts and commitment<br />

to execute the campaign have been<br />

directly involved in the construction<br />

of centers in the following places: El<br />

Copé de Olá, Quebrada Guabo, Las Pipas<br />

de los Pozos, Ballestilla, Chiriquí Viejo,<br />

Divalá, Buenos Aires de Ñurum, and<br />

the first center in Los Valles de Cañazas.<br />

It is also responsible for the construction<br />

of the sub-centers in the following<br />

places: Tolote, Orema, Huacas, Cerro<br />

Ortiga, Suiche, Los Guarumos, and<br />

Lajero Abajo.<br />

Susy de Varela, National Director of<br />

Nutre Hogar, describes “The Children<br />

First” as “a project model of successful<br />

development, which can be used as an<br />

example for other countries because it<br />

is very broad through its emphasis in<br />

primary childhood, but is also directed<br />

to the entire family nucleus.”<br />

Our best practice example project fulfills<br />

most of the eight Millennium Development<br />

Goals because it helps eradicate<br />

extreme poverty and hunger; promotes<br />

gender equality and empowers women;<br />

reduces child mortality; improves maternal<br />

health; and ensures environmental<br />

sustainability. Also, it is important to<br />

mention that the following community<br />

centers have been declared malnutritionfree:<br />

Los Valles de Cañazas, El Copé de<br />

Olá, Las Pipas de los Pozos, Quebrada<br />

Guabo, and Ballestilla. The centers are<br />

operated entirely by the inhabitants of<br />

the communities where they are located.<br />

They are self-sustainable because the<br />

food served in their dining halls, which is<br />

not from the food drives, comes directly<br />

from local farms in each center. They are<br />

also conscious of the environment because<br />

the stoves have “Eco-Tec” technology,<br />

which reduces the average amount<br />

of firewood used by the burners by 35<br />

percent. The centers also have waste<br />

incinerators to prevent the pollution<br />

of rivers and they also offer orientation<br />

for the beneficiary families.<br />

By 2011 Nutre Hogar’s community centers<br />

had 37 operating dining halls; they<br />

have served 5,044 communities; benefitted<br />

2,800 families; and have educated<br />

3,947 people on topics like health,<br />

nutrition, production, and community<br />

organization and stimulation. Corporación<br />

Medcom, as a socially responsible<br />

organization, is proud to have been the<br />

creator of the project “Los Niños Primero”<br />

(The Children First) and hopes to be an<br />

essential part of it for many years to<br />

come.<br />

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85


Best Practice<br />

Human Rights<br />

Mitsui<br />

Great East Japan<br />

Earthquake Restoration<br />

Efforts<br />

March 11, 2011 – This will be a date long remembered by<br />

Japan and the world at large. Since the aftermath of the Great<br />

East Japan Earthquake that hit the Tohoku area north of Japan,<br />

Mitsui & Co. (“Mitsui”) has been conducting various activities<br />

in terms of recovery support through social contribution<br />

activities and through Mitsui’s core business.<br />

By Mitsui & Co. Restoration Support Team<br />

As the events following the earthquake<br />

unfolded, Mitsui considered what the<br />

company and its employees could do to<br />

help the affected areas in urgent need<br />

of a lifeline and all manner of supplies.<br />

Calls and requests offering support and<br />

donations flooded into the social contribution<br />

team from all over Japan and the<br />

worldwide network of Mitsui. A crossorganizational<br />

Restoration Support Team<br />

was immediately set up within the company<br />

to help gather knowledge and information<br />

to provide optimal emergency<br />

support to the affected areas.<br />

On March 14, Mitsui decided to<br />

provide 400 million Japanese yen to support<br />

the company-wide collective social<br />

contribution efforts. Out of this budget,<br />

345 million yen was provided directly<br />

to the affected areas, and the remainder<br />

was utilized as donations to NGOs and<br />

in-kind support. In August, an additional<br />

400 million yen was allocated for the<br />

restoration efforts, some of which was<br />

provided as a donation for building a<br />

library in the affected areas.<br />

An example of the types of in-kind<br />

support offered was the provision of solar<br />

lanterns to the areas that lacked electricity.<br />

On March 18, a total of 4,000 solar<br />

lanterns were delivered by truck to the<br />

evacuation shelters in Minamisanrikucho,<br />

Miyagi Prefecture. In addition, the<br />

Food and Retail Business Unit provided<br />

bread, milk, and other food staples, and<br />

transportation logistics support was provided<br />

to deliver a solar-powered container<br />

facility – this was the kind of support<br />

that was possible due to the specific<br />

strengths and business activities of the<br />

Mitsui Group.<br />

Demonstration of employees’ efforts<br />

and good will to help<br />

In addition to the above corporate donation<br />

and in-kind support, Mitsui’s<br />

employees responded very quickly and<br />

proactively in lending both personal and<br />

voluntary support. As soon as calls for<br />

donations were posted on the company<br />

website, donations poured in at an unprecedented<br />

rate, resulting in a total of<br />

more than 47 million yen in less than<br />

10 weeks. The company then took a vote<br />

from employees on where these donations<br />

could be best allocated, and as a<br />

result donations were allocated to the<br />

affected prefectures and selected NGOs.<br />

The effort is ongoing, and the cumulative<br />

amount of employee donations collected<br />

as of the end of Fiscal Year <strong>2012</strong> was<br />

around 52 million yen.<br />

The company also provided a platform<br />

to encourage employees to participate<br />

in volunteer activities in the<br />

affected areas. First of all, Mitsui decided<br />

to change the guidelines and to extend<br />

the volunteer leave to a maximum of 10<br />

days per year. Second, Mitsui partnered<br />

with the NGO Japan Emergency Network<br />

(JEN) to set up details and logistics for<br />

the employees’ volunteer program. The<br />

program commenced in May 2011, with<br />

a maximum of 10 employees visiting the<br />

seriously affected areas in the northern<br />

part of the Miyagi prefecture. Activities<br />

ranged from cleaning up debris from<br />

houses, buildings, schools, and rivers to<br />

setting up nets and the necessary infrastructure<br />

to rehabilitate the fishery and<br />

oyster culture that the region is famous<br />

for. As of the end of May <strong>2012</strong>, 660 employees<br />

participated in the volunteer<br />

activities, and the effort and good will<br />

shall continue.<br />

For the children’s future: Books and<br />

room to read<br />

On the day the earthquake and the tsunami<br />

swept through the northeastern coast<br />

of Japan, the city of Rikuzen Takada in<br />

Iwate Prefecture faced massive damage of<br />

the facilities, including the city’s municipal<br />

library. The Imaizumi Shrine was also<br />

3,000 books were donated<br />

to the “Rainbow Library”.<br />

left completely devastated, and only the<br />

800-year-old Japanese cedar tree survived<br />

the massive waves of the tsunami. Mitsui<br />

decided to donate a library facility to be<br />

built on the shrine’s compound, using<br />

lumber from trees that are grown and<br />

managed in Mitsui’s company-owned<br />

forests located in Hokkaido. More than<br />

3,000 books were donated to the “Rainbow<br />

Library,” which started operation in<br />

November 2011. The Rainbow Library<br />

is run and operated by an organization<br />

consisting of novelists and publishers,<br />

and is expected to continue operation<br />

for two years. On December 25, Mitsui’s<br />

employees volunteered to visit the library<br />

and helped organize the Christmas Book<br />

Reading event for children. The library<br />

provides a space filled with the scent of<br />

natural wood – a community where<br />

both parents and children can relax and<br />

enjoy reading various books and novels.<br />

What we can do together to realize a<br />

sustainable environment<br />

In order to improve and resolve various<br />

environmental issues that have arisen<br />

due to the earthquake, Mitsui decided to<br />

provide Restoration Grants geared specifically<br />

to the activities and research aimed<br />

at the establishment of a sustainable<br />

society in the affected areas. Since the<br />

aftermath of the earthquake, Mitsui made<br />

four calls, which ultimately resulted in<br />

711 applications. Based on the selection<br />

process, Mitsui decided to provide 943<br />

Employee Volunteer<br />

Activity<br />

million yen to 77 projects. Given that<br />

restoration efforts require continuous<br />

involvement and attention, in addition<br />

to the conventional activity and research<br />

grants, Mitsui decided to continue calls<br />

for applications for Restoration Grants<br />

for the Fiscal Year <strong>2012</strong>.<br />

Contribution through our strength<br />

in core business activities<br />

Mitsui is considering possible business<br />

activities that are tied to the local communities<br />

in the affected areas over the<br />

medium to long term. Consideration<br />

is based on specific requests from the<br />

affected areas and whether or not such<br />

activities would contribute to the new<br />

and sustainable development of the<br />

Tohoku region.<br />

For example, Mitsui has assisted<br />

Car Sharing Japan in providing car sharing<br />

activities for areas in need of basic<br />

transportation. Work is also currently<br />

under way to identify and implement<br />

new projects related to restoration of<br />

the industrial platforms in areas ranging<br />

from fishery to agriculture, healthcare,<br />

energy, and transportation.<br />

We hope that by utilizing the knowledge<br />

and know-how of all employees<br />

and through contributions by the entire<br />

Mitsui Group, the engagement will lead<br />

to growth in employment and restoration<br />

of the societal foundation to support<br />

stable and sustainable growth in the<br />

Tohoku region.<br />

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87


Best Practice<br />

Human Rights<br />

Novo Nordisk<br />

Wellness for All:<br />

Thinking <strong>Global</strong>ly, Acting<br />

Locally<br />

By Scott Dille<br />

NovoHealth is a worldwide company program seeking to develop a workplace culture<br />

that promotes and supports healthy living for all employees – an opportunity for Novo<br />

Nordisk to practice what we preach. NovoHealth inspires healthy living among Novo<br />

Nordisk employees as a means to prevent Type 2 diabetes and other lifestyle-driven diseases.<br />

NovoHealth gives us an exciting opportunity to bring the organization together across the<br />

globe, support our colleagues, address our social responsibility as an employer, and improve<br />

business performance.<br />

Guo Yun,<br />

Human Resource Director<br />

Novo Nordisk China<br />

There is no dispute that our planet is<br />

coming under increasing pressure to<br />

meet our resource demands and sustain<br />

its resilience. It is also becoming<br />

apparent that the global rise in lifestylerelated<br />

non-communicable diseases<br />

(NCDs) – like Type 2 diabetes – share<br />

many of the same root causes. Not only<br />

does a growing and aging urban middle<br />

class with unsustainable consumption<br />

patterns threaten to push us toward<br />

the limits of natural resources and<br />

planetary life support systems, it also<br />

threatens to compromise the health of<br />

the next generation. The sad outcome<br />

– if nothing is done to reverse it – will<br />

be a rise in lost life years and quality of<br />

life, resulting in stagnating productivity,<br />

anemic development, and swelling<br />

healthcare costs.<br />

To put things into perspective for<br />

employers worldwide, 25 percent of the<br />

36 million deaths from NCDs each year<br />

occur in those aged 60 and under – in<br />

other words, among the working-age<br />

population. The cost from NCDs to the<br />

world economy over the next 20 years<br />

is estimated by the World Health Organization<br />

and Harvard University to<br />

be approximately $30 trillion.<br />

This year’s Rio+20 United Nations<br />

Conference on Sustainable Development<br />

is yet another ideal opportunity<br />

to address these challenges at the global<br />

level. And hopefully we can put things<br />

back on a sustainable path. Novo Nordisk<br />

stands ready to support global<br />

solutions, but we are convinced that<br />

our greatest contribution needs to take<br />

place locally.<br />

As the global leader in diabetes<br />

care, Novo Nordisk is driven by a very<br />

simple commitment: to help people<br />

live healthier lives. Our leadership is<br />

defined by our actions with the goal of<br />

enabling people to live longer, healthier,<br />

and more productive lives. One place<br />

where we can make the most impactful<br />

difference is with the 35,000 people<br />

who come to work every day. It is this<br />

opportunity to make a difference that<br />

drives our internal NovoHealth global<br />

initiative.<br />

Change starts from within<br />

NovoHealth began as an executive<br />

management-led initiative to lead<br />

the fight against diabetes internally.<br />

It started with local activities focused<br />

on Novo Nordisk’s operations in Denmark.<br />

In 2006, it was decided to build<br />

NovoHealth into a global program, supporting<br />

affiliates and employees across<br />

the globe.<br />

The global launch took place in<br />

January 2008, when NovoHealth was<br />

introduced to the top 300 managers<br />

in the company and the local implementation<br />

began. A cornerstone of<br />

the program’s rollout was respect for<br />

cultural differences – for each of us to<br />

achieve a lifestyle change as individuals,<br />

encouragement is a step in the right<br />

direction. To truly succeed, change<br />

must start from within.<br />

Today, NovoHealth is based on<br />

four global standards that form the<br />

foundation of our voluntary employee<br />

health promotion program and support<br />

employees in leading a lifestyle that<br />

prevents diabetes and other NCDs. The<br />

four key health areas are:<br />

• Provide healthy food in the workplace<br />

and encourage a healthy diet.<br />

• Provide access to and encourage employees<br />

to do physical activity.<br />

• Provide a smoke-free work environment<br />

and emphasize the benefits of<br />

non-smoking.<br />

• Provide access to and encourage health<br />

checks with individual advice.<br />

Going forward, NovoHealth will continue<br />

to support the organization’s employees<br />

in living a healthier lifestyle with respect<br />

to future challenges, i.e. our company<br />

growth, aging workforce, etc. To ensure<br />

success, processes are measured to<br />

identify and build on what works (stop<br />

smoking, eat healthier, be more physically<br />

active) and prioritize best practices<br />

that have an impact.<br />

“Human beings are at the center of<br />

concerns for sustainable development.<br />

They are entitled to a healthy<br />

and productive life in harmony with<br />

nature.”<br />

Rio Declaration on Environment<br />

and Development, Principle 1<br />

Sharing best practice – Action on<br />

Diabetes<br />

In September 2011, the United Nations<br />

held a High-level Meeting on Non-communicable<br />

Diseases. One of the important<br />

and valued outcomes was a political<br />

declaration calling for multi-sectoral<br />

interventions to include “the provision of<br />

incentives for work-site healthy-lifestyle<br />

programs” and specifically calling on the<br />

private sector to “promote and create<br />

an enabling environment for healthy<br />

behaviors among workers.” NovoHealth<br />

fit perfectly with the declaration as an<br />

existing program that we could leverage<br />

outside of our own walls.<br />

According to the <strong>International</strong> Diabetes<br />

Federation, more than 20 percent of<br />

Qataris have diabetes, one of the highest<br />

rates of diabetes prevalence in the region.<br />

Bringing this number down requires a<br />

tremendous joint effort.<br />

“Action on Diabetes” was launched<br />

in November 2011 as a partnership between<br />

the Qatar Supreme Council of<br />

Health, the Hamad Medical Corporation,<br />

the Qatar Diabetes Association, Maersk<br />

Oil, and Novo Nordisk. The project’s<br />

ambition is to raise awareness of diabetes,<br />

advise on how to prevent it, and support<br />

people already living with diabetes to<br />

manage their health better.<br />

NovoHealth entered into the partnership<br />

as a means to help Maersk Oil<br />

Qatar implement an employee health<br />

program for all their employees, ensuring<br />

support for better health and providing<br />

opportunities for individuals to reduce<br />

personal risk factors that predispose<br />

them to diabetes and other NCDs. We<br />

will bring our knowledge and experience<br />

with health promotion to the table, but<br />

also rigorously analyze what works best<br />

in Qatar and which best practices can be<br />

used in other work settings.<br />

Recognizing opportunities to make<br />

a difference<br />

With more than a third of the global<br />

workforce suffering from preventable<br />

diseases annually, inaction will lead to<br />

a significant financial burden on businesses<br />

and the economy. But there is<br />

also an opportunity here for focused,<br />

localized action. It is estimated that up<br />

to 40 percent of NCDs can be prevented<br />

through workplace wellness schemes,<br />

and they have demonstrated a clear return<br />

on investment with cost savings of<br />

up to $4 for every $1 spent. By starting<br />

within our own organizations, workplace<br />

wellness schemes, like NovoHealth, can<br />

address lifestyle changes and promote<br />

health, creating shared value for both<br />

society and companies.<br />

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89


Best Practice<br />

Human Rights<br />

Sakhalin Energy<br />

Responsible Engagement –<br />

Core Element of Securing<br />

Human Rights<br />

By Natalia Gonchar, Marina Ee and Elena Alyokhina<br />

Sakhalin Energy Investment Company Ltd. (Sakhalin Energy) is the operator of the<br />

Sakhalin-2 project, which involves the development of two oil and gas fields offshore from<br />

the Sakhalin Island.<br />

Sakhalin-2 is one of the world’s biggest<br />

integrated oil and gas projects. The company<br />

was established in 1994 specifically<br />

for the development of this project. Since<br />

1999, the company has been producing oil<br />

from Molikpaq – Russia’s first offshore<br />

ice-class platform – as part of Phase 1 of<br />

the project, during ice-free seasons. Two<br />

more offshore platforms were built and<br />

commissioned during Phase 2, which also<br />

included the following: around 300 km<br />

of offshore pipelines to connect all the<br />

platforms to the shore; some 1,600 km of<br />

onshore oil and gas pipelines; an onshore<br />

processing facility; an oil export terminal;<br />

and Russia’s first liquefied natural gas<br />

plant, launched in 2009. As Russia’s most<br />

innovative and technologically advanced<br />

project, Sakhalin-2 plays its part in the<br />

overall development of the Russian oil<br />

and gas industry.<br />

In recent decades, more attention has<br />

been paid to the social responsibility of<br />

business and the effective cooperation between<br />

business, governments, and society.<br />

<strong>Global</strong> experience has confirmed that<br />

only businesses that follow responsible<br />

business practices can achieve long term<br />

success. These practices are based on<br />

respect for human rights, transparency,<br />

non-financial reporting, environmental<br />

responsibility, caring about personnel,<br />

and making contributions to the sustainable<br />

development of the region.<br />

In the age of economic globalization and<br />

the current financial crisis, corporate<br />

social responsibility (CSR) assumes special<br />

significance. What are the benefits<br />

that responsible business practices can<br />

provide? Internally, this is an effective<br />

risk-management mechanism that can<br />

prevent or minimize the problems within<br />

a company, with contractors, or across<br />

an entire value chain. Externally, this<br />

gives an opportunity to share best CSR<br />

knowledge and to promote it globally,<br />

which, in the end, contributes to global<br />

sustainable development<br />

For Sakhalin Energy, the five CSR pillars are:<br />

• observance of and respect for human<br />

rights<br />

• accountability and transparency<br />

• ethical behavior<br />

• respect for stakeholders’ interests<br />

• supremacy of the law and compliance<br />

with internationally accepted codes of<br />

conduct<br />

Effective stakeholder engagement is an<br />

important and integral element of successful<br />

operations of the company. The<br />

statement on transparent and open stakeholder<br />

engagement is included in the<br />

company’s General Business Principles.<br />

Sakhalin Energy uses a systematic and<br />

proactive approach based not only on<br />

Russian national standards but also on<br />

the best international standards. Special<br />

engagement programs are carried out<br />

for communities and vulnerable groups<br />

that may be affected by the company’s<br />

activities.<br />

Sakhalin Energy’s engagement with stakeholders<br />

is based on the commitments set forth in<br />

the key corporate documents, which include:<br />

• “Statement of General Business Principles”<br />

• “Sustainable Development Policy”<br />

• “Commitments and Policy on HSE and<br />

Social Performance”<br />

• “Public Consultations and Information<br />

Disclosure Specification” of Social<br />

Performance Standard<br />

“Implementation of a project like<br />

this would not be possible without<br />

strict adherence to the best international<br />

standards in business ethics<br />

and corporate social responsibility<br />

(CSR), and sometimes even development<br />

and implementation of new<br />

standards. Strong, transparent, contractive,<br />

and systematic cooperation<br />

and two-way communication<br />

with all groups of stakeholders has<br />

proved to be the backbone of success<br />

and has been highly appreciated<br />

by all groups of stakeholders<br />

and experts.”<br />

Andrei Galaev, CEO of Sakhalin Energy<br />

• “Public Consultation and Disclosure<br />

Plan”<br />

The above-listed documents define the<br />

engagement strategy, principles, mechanisms,<br />

and tools. The company reports<br />

on engagement outcomes primarily via<br />

public consultations and information<br />

disclosure reports.<br />

Stakeholder engagement mechanisms<br />

and tools are selected based on the<br />

stakeholder engagement goals and the<br />

stakeholder group.<br />

Five basic complementary and interdependent<br />

mechanisms are used:<br />

• Impact assessment – free, prior, informed,<br />

participatory consultations<br />

with project-affected communities.<br />

• Ongoing three-level system of direct<br />

communication with community –<br />

open public meetings; focused / group<br />

/ individual meetings and workshops;<br />

Community Liaison Officers’ open<br />

hours and special information centers<br />

in local libraries in 23 Sakhalin<br />

communities, etc.<br />

• Grievance addressing procedures.<br />

• Partnerships – strategic cooperation<br />

with public and authorities in delivering<br />

social and environmental projects<br />

based on co-ownership and equitableness.<br />

• Public reporting – primary annual Sustainable<br />

Development report prepared<br />

as per <strong>Global</strong> Reporting Initiative and<br />

AA1000 standards.<br />

All of them proved their efficiency and<br />

value, both for business and stakeholders<br />

during all project development phases<br />

of Sakhalin-2.<br />

Grievance management<br />

Large-scale projects like Sakhalin-2 inevitably<br />

generate questions and concerns<br />

for residents living in the project area.<br />

In order to ensure that public grievances<br />

are processed in a timely and effective<br />

manner and in accordance with international<br />

best practice, the company developed<br />

and implemented its Grievance<br />

Procedure. This procedure is one of the<br />

key elements demonstrating the social<br />

responsibility, respect for human rights,<br />

and high social standards adopted by<br />

the company.<br />

The procedure guarantees that grievances<br />

are resolved in a timely and effective<br />

manner, that they are less likely to reappear,<br />

that they are properly documented,<br />

and that the respective corrective and<br />

preventive measures are taken.<br />

The following are key principles of Sakhalin<br />

Energy’s Grievance Procedure:<br />

• Legitimacy and incorporation into<br />

management systems (the grievance<br />

procedure consists of elements and<br />

mechanisms that ensure trust by stakeholders<br />

and affected groups targeted by<br />

this procedure). The Grievance Procedure<br />

includes independent procedures<br />

of assessment, resolution, and monitoring<br />

of grievances. The grievance<br />

status and progress are controlled by<br />

the company’s top management, and<br />

audited both externally and internally.<br />

Furthermore, the grievance handling<br />

process is assessed by the company’s<br />

inter-directorate committees, registered,<br />

and tracked in the automated incident<br />

tracking system.<br />

• Accessibility (ensuring awareness of all<br />

targeted stakeholders). There are different<br />

channels for logging grievances,<br />

thus making the company accessible<br />

when communicating with complainants.<br />

Among those channels are the<br />

company’s information centers, Community<br />

Liaison Officers, a dedicated<br />

hotline, email addresses, etc. Regular<br />

awareness campaigns and trainings<br />

are held to keep communities and contractors<br />

/ subcontractors fully informed.<br />

The company uses feedback from the<br />

population and other stakeholders to<br />

assess the effectiveness of these channels.<br />

• Transparency and openness. The company<br />

regularly informs all stakeholders<br />

on the status and progress of grievance<br />

processes, provides enough details on<br />

its results, and incorporates the grievance<br />

updates in public reporting.<br />

90 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

91


Best Practice<br />

Human Rights<br />

Sakhalin Energy<br />

• Stakeholder engagement and ensuring<br />

dialog while addressing grievances.<br />

Sakhalin Energy conducts regular consultations<br />

with communities and other<br />

various stakeholder groups with regard<br />

to the effectiveness of the process for addressing<br />

grievances. Such consultations<br />

are part of the community engagement<br />

with focus groups and constitute an<br />

integral part of internal social performance<br />

monitoring. Special emphasis is<br />

put on dialog with complainants as part<br />

of the process for addressing grievances<br />

and the decision making required for<br />

its resolution.<br />

• Predictability in terms of process and<br />

ensuring concerted actions. It is a clear<br />

and straightforward procedure, which<br />

sets time limits for each stage of grievance<br />

handling and communication with<br />

complainants throughout the whole<br />

process.<br />

• Confidentiality. All grievance-related<br />

issues are addressed confidentially. Information<br />

of complainants is not to<br />

be disclosed without a complainant’s<br />

written consent.<br />

• Applicability both for the company and<br />

contractors. The company’s Grievance<br />

Procedure is mandatory for all of the<br />

company’s functions, as well as for its<br />

contractors and subcontractors.<br />

• Using the experience gained for preventive<br />

and proactive measures and continuous<br />

improvement. All grievances<br />

filed with Sakhalin Energy are tracked<br />

and the tendencies are analyzed. Based<br />

on such analysis, recommendations are<br />

formulated for the company’s respective<br />

functions and contractors / subcontractors<br />

with respect to impact mitigation<br />

and preventive measures.<br />

Safety is our first priority<br />

Safety is one of the most critical human<br />

needs, along with the need for food,<br />

water, and housing. <strong>Global</strong>ly, more than<br />

220 million people are annually affected<br />

by natural disasters, and more than 66<br />

million of them are children. A child’s<br />

safety is an overall priority, as children<br />

are more vulnerable and helpless in a<br />

dangerous situation.<br />

The Asia Pacific region is vulnerable to<br />

many types of disasters. The environment<br />

conditions of Sakhalin Island, located in<br />

the Russian Far East, resemble those of<br />

the true Arctic. In addition, the island has<br />

a high seismicity and susceptible to other<br />

natural calamities such as hurricanes,<br />

tsunamis, forest fires, etc. Operating<br />

in the harsh environment of the island,<br />

Sakhalin Energy uses a systematic approach<br />

regarding health, safety, security,<br />

and environmental management in order<br />

to ensure continuous improvement in<br />

performance. The company is seeking<br />

to achieve the highest standards and is<br />

following corporate principles and values,<br />

with a key focus on safety.<br />

At the same time, effective stakeholder<br />

engagement and appropriate communication<br />

regarding safety has become one<br />

of the key priorities of Sakhalin Energy.<br />

Educating children on rules of conduct<br />

during emergencies is a critical element<br />

of community preparedness. Due to the<br />

complexity of the goal and the significant<br />

area of coverage, a partnership was established<br />

between Sakhalin Energy, the<br />

Sakhalin Ministry of Education, and the<br />

Ministry of Emergency Situations (EMER-<br />

COM). The partnership promotes rules<br />

of safe behavior in order to minimize<br />

the risk of children finding themselves<br />

in emergency situations. These efforts<br />

have been realized through the Sakhalin<br />

Energy’s program “What to Do in<br />

Emergency Situations.”<br />

The program<br />

“What to Do in Emergency Situations” has<br />

been in operation since 2005. The program<br />

introduces modern technology and<br />

safe behavior education for preschoolers<br />

and school-age children. These children<br />

can, in turn, teach preparedness for<br />

emergency situations to their relatives<br />

and friends. The integrated program is<br />

implemented using four main means:<br />

1. Educational cartoons<br />

Specially created animated cartoons aim<br />

at enhancing children’s awareness of<br />

safe behavior in different situations.<br />

The main character of these clips, a boy<br />

named Senya, teaches children the rules<br />

of behavior in emergencies and ways<br />

to prevent dangerous situations in a<br />

simple and understandable form. The<br />

cartoons’ topics cover many dangerous<br />

situations that children would find in a<br />

modern society: road traffic, games on<br />

the ice in winter, bathing in unknown<br />

water basins, earthquake, tsunami, snow<br />

avalanche, etc. The cartoons have undergone<br />

expert review in the Russian<br />

Emergency Psychological Aid Centre<br />

of EMERCOM and are used in different<br />

regions of Russia.<br />

2. Resource classrooms for life<br />

safety fundamentals<br />

Resource classrooms for conducting lessons<br />

on “Fundamentals of Life Safety”<br />

have been equipped and opened in 12<br />

Sakhalin districts.<br />

These classrooms are used for conducting<br />

lessons for students of schools where the<br />

resource classes are located, as well as<br />

offering activities for parents and students<br />

of other educational institutions,<br />

teachers from other districts, and the<br />

general public. In 2011 a professional<br />

contest was organized for specialists<br />

teaching safety essentials. More than<br />

40 teachers from 13 Sakhalin districts<br />

participated. One result of the contest<br />

was a book of best teaching practices,<br />

“Fundamentals of Life Safety,” which was<br />

published and distributed in all Sakhalin<br />

schools and libraries.<br />

3. Special safety events<br />

The special events involving preschoolers<br />

and primary school children are<br />

held on a regular basis and are targeted<br />

to consolidate and practice knowledge<br />

about the rules of safe behavior. Using<br />

role play techniques, life-size puppets –<br />

the animated cartoon character Senya<br />

and his friend Vas’ka the Cat – remind<br />

the young participants about the safe<br />

behavior rules and conduct subject trivia<br />

games. Such events are always an ap-<br />

preciated break for the young residents<br />

of the island.<br />

The biggest event is traditionally arranged<br />

on the second Wednesday of<br />

October – the <strong>International</strong> Day for<br />

Natural Disaster Reduction. Hundreds<br />

of schoolchildren from all over Sakhalin<br />

take part in safety contests and receive<br />

expert refereeing from EMERCOM professionals.<br />

4. Special safety projects<br />

• The special project “Senya and I go<br />

to School” is targeted at first-grade<br />

pupils. Going to school marks the start<br />

of a new period in a child’s life. It is<br />

naturally characterized by greater independence<br />

and more responsibility,<br />

including responsibility for personal<br />

safety. Under this project, each firstgrade<br />

pupil of Sakhalin (in total about<br />

5,000 children) was presented with a<br />

comics book based on the animated<br />

cartoons of Senya’s adventures. The<br />

lessons and events devoted to life safety<br />

fundamentals were conducted in all<br />

Sakhalin schools.<br />

• Sakhalin is a place with magnificent<br />

landscapes. Many Sakhalin families are<br />

keen on hiking. The project “Safety of<br />

Tourist Routes” was naturally supported<br />

for implementation by all partners.<br />

The ecological trail to Chekhov Peak –<br />

the most popular tourist route among<br />

Sakhaliners – was properly equipped<br />

and accompanied with information<br />

stands. It was coupled with an informational<br />

and promotional event on safe<br />

hiking, as well as a creative contest:<br />

On a Hike with Senya. More than 500<br />

creative works were submitted.<br />

• The special project “Senya Warns” includes<br />

the marking of tsunami and<br />

snow avalanche danger zones as well<br />

as a dedicated information campaign.<br />

In 2011 it was launched in Nevelsk, a<br />

Sakhalin district that suffered from<br />

an earthquake and its consequences<br />

in 2007.<br />

In 2011 the program website was<br />

launched (www.senya-spasatel.ru) with<br />

all program-related materials made available,<br />

making it helpful for teachers,<br />

parents, and children. One can find<br />

promotion materials on safety essentials<br />

to be used in class (cartoons, comics<br />

books, handouts, etc.) or for after-school<br />

activities (scenarios of the events), and<br />

watch favorite cartoons online.<br />

A partnership approach and joint publicprivate<br />

efforts have allowed all participants<br />

to consolidate resources effectively<br />

and carry out actions more productively<br />

and on a substantial scale.<br />

Program recognition was analyzed in<br />

the course of an independent public<br />

opinion survey. It confirmed 90 percent<br />

recognition of the program among<br />

children. Can Senya be more popular<br />

than Mickey Mouse?... For Sakhalin, the<br />

answer is yes.<br />

“A topic unusual for corporate programs<br />

should be noted – safety of<br />

children and promotion of behavior<br />

rules in emergencies, which is<br />

however a fairly urgent problem<br />

for residents of Sakhalin and<br />

Kamchatka. The partnership with<br />

relevant organizations, first of all,<br />

with regional EMERCOM, ensured<br />

the professional approach and high<br />

level of execution of all the program<br />

elements – from the cartoon<br />

clips to the life safety classroom<br />

equipment.”<br />

The Corporate Donor, All-Russian contest<br />

for Best Social Investment Practices, arranged<br />

by PricewaterhouseCoopers, Vedomosti<br />

newspaper, and the Forum of Donors.<br />

“Implementation of the ‘What to<br />

Do in Emergency Situations’ joint<br />

program for Sakhalin EMERCOM<br />

is one of the ways to train the<br />

population in the sphere of life<br />

safety. In addition, this program<br />

helps increase the efficiency of<br />

educating children – the hero of the<br />

cartoons Senya and his advice on<br />

safe behavior rules are well-known<br />

to young residents of Sakhalin and<br />

the Kuril Islands. Children are our<br />

future, and ‘What to Do in Emergency<br />

Situations’ contributes to<br />

making it safer.”<br />

Taimuraz Kasayev, Chief of Sakhalin<br />

EMERCOM<br />

92 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

93


Best Practice<br />

Human Rights<br />

SK Telecom<br />

A Journey of Passion<br />

and Innovation Toward<br />

Stakeholder Happiness<br />

Like most other countries across the globe, Korea has many issues to tackle regarding the<br />

widening gap between education and wealth levels. To narrow the gap, SK has enacted<br />

a wide range of social activities as well as made efforts to drive economic growth as a<br />

responsible corporate citizen. But in the process of undertaking such activities, SK soon<br />

realized that simple acts of charity are not enough to find an efficient solution to the<br />

deep-rooted malaise in society, and that a social enterprise can be a mechanism to address<br />

pressing issues and create sustainable values. As the first step toward utilizing such a<br />

valuable tool, SK raised KRW 50 billion in 2009 to support social enterprises on a large scale.<br />

Chey Tae-won, Chairman of<br />

SK Group, invited Chinese<br />

opinion leaders to discuss<br />

issues and challenges for<br />

social enterprises at the Boao<br />

Forum for Asia <strong>2012</strong>.<br />

Offline contests are also conducted to<br />

develop ideas and train social entrepreneurs.<br />

Lastly, we undertake pro-bono volunteer<br />

work to utilize the expertise of SK<br />

employees to better develop social enterprises.<br />

They can provide financing,<br />

marketing, and legal support, depending<br />

on their areas of expertise. This greatly<br />

helps social enterprises improve their<br />

sales, reduce expenses, and raise sustainability.<br />

Pro-bono activities also provide personal<br />

fulfillment for participating SK employees.<br />

They feel rewarded, gain a sense<br />

of accomplishment, and improve their<br />

capabilities through these activities. All<br />

of these things reflect our efforts to create<br />

value by reinforcing the SK model.<br />

Outcome and future plans<br />

By the SKT CSR Office<br />

Why social enterprises?<br />

When a company creates social value<br />

by carrying out its for-profit business<br />

activities, it is called “a social enterprise.”<br />

The Korean government has been active<br />

in supporting such companies as<br />

a way to create jobs and social services<br />

for the underprivileged. With governmental<br />

subsidy programs for certified<br />

social enterprises, the number of social<br />

enterprises has grown rapidly over the<br />

last five years.<br />

However, most of the newly established<br />

social enterprises have been struggling<br />

both commercially and financially. Some<br />

of them went out of business right after<br />

the government stopped its support.<br />

There are two reasons behind such failures.<br />

First, many social enterprises were<br />

founded by social entrepreneurs lacking<br />

entrepreneurial mindsets. Secondly,<br />

young talented workers do not want to<br />

work at social enterprises, fearing that<br />

such companies cannot make profits.<br />

Unlike in the West, where social enterprises<br />

are usually established by businessmen<br />

with innovative ideas and an<br />

entrepreneurial spirit, the ones in Korea<br />

were mostly initiated with the help of<br />

government subsidies. Recognizing such<br />

problems, SK has taken the initiative<br />

in establishing and supporting social<br />

enterprises.<br />

We opted for two ways to grow social<br />

enterprises. First, we leveraged our social<br />

partners’ various capabilities. This was to<br />

create maximum synergy by combining<br />

different but complementary strengths.<br />

So far, six social enterprises have been<br />

built within the context of three projects:<br />

Happy School for afterschool education;<br />

Happy Library for providing small libraries<br />

in apartment complexes; and Happy<br />

New Life for jobs to ex-convicts. Second,<br />

we utilized SK’s own business acumen<br />

in establishing, facilitating, and operating<br />

social enterprises and created four<br />

social enterprises – one good example<br />

of which is Happy ICT. Established by SK<br />

Telecom, Happy ICT fully leverages its<br />

own R & D to develop PC or smart phonebased<br />

applications for public interest. It<br />

provides jobs to the underprivileged and<br />

the disabled.<br />

In the past, most of the jobs created<br />

by social enterprises were menial jobs<br />

that did not require specific skills. Their<br />

profitability was low and working conditions<br />

were poor. Even though there were<br />

various IT training programs certified by<br />

the government, they did not guarantee<br />

any actual jobs in the IT sector, thereby<br />

failing to address the jobless issue of<br />

the unemployed. Happy ICT creates an<br />

opportunity for the underprivileged to<br />

land value-added and high-paying jobs<br />

in the technology sector. In the long<br />

term, Happy ICT is expected to build a<br />

social safety net in the mobile sector and<br />

reduce digital divides between different<br />

social classes by developing applications<br />

and websites for the public good that<br />

had not been sufficiently provided due<br />

to profitability issues.<br />

Support and ecosystem for social<br />

enterprises<br />

Even before establishing our own social<br />

enterprise, SK had provided support by<br />

facilitating the establishment of 62 social<br />

enterprises. We have utilized about<br />

$18 million in funding and provided<br />

management mentoring to social entrepreneurs.<br />

For example, Happy Lunchbox<br />

provides free meals to low-income<br />

seniors and children who skip meals to<br />

save money. It was started in 2005 as<br />

part of the effort to create jobs for the<br />

underprivileged. There are 30 Happy<br />

Lunchbox Centers across the country,<br />

which provide meals for 12,000 people<br />

a day. We were involved in the lunch<br />

distribution facilities in the initial stage,<br />

supported their management costs for<br />

two years thereafter, and we continue<br />

to conduct sanitary checks on facilities<br />

while providing consulting services to<br />

ensure management efficiency.<br />

We are also working to create and support<br />

an optimum ecosystem for social<br />

enterprises. To attain this goal, we built<br />

a website named “Se-sang,” which promotes<br />

on- and offline communication<br />

for those interested so they can make<br />

their voices heard through the website.<br />

People can also benefit from SK’s research<br />

results, which are shared freely<br />

on the website in order to help with any<br />

issues about running a social enterprise.<br />

Compared to traditional corporate social<br />

contributions, social enterprises create<br />

much more value. They teach people<br />

how to catch fish – rather than just<br />

distribute fish for one meal – and teach<br />

them how to then go on and transform<br />

the fishing industry itself. Corporate<br />

social contributions need strategic endeavors<br />

– like teaching people how to<br />

fish and transforming the fishing industry<br />

– in order to generate maximum<br />

output with minimum input. In this<br />

context, social enterprises can be the<br />

optimal tool to innovate society.<br />

We aim to create 4,000 jobs and establish<br />

30 more companies by 2013.<br />

Over the long term, we will extend<br />

our innovations further to come up<br />

with real and applicable solutions to<br />

global issues. We are building a new,<br />

innovative model to further develop<br />

social enterprises. We understand that<br />

there are diverse challenges on the road<br />

ahead. However, we are sure that we<br />

will overcome them and successfully<br />

develop a new model that will serve<br />

as a guide for others to improve their<br />

communities in the most efficient and<br />

innovative way.<br />

94 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

95


Best Practice<br />

Human Rights<br />

Teck<br />

Addressing the <strong>Global</strong><br />

Health Issue of Zinc<br />

Deficiency<br />

By Emily Hamer<br />

A mother and child visit a health post<br />

in Senegal to learn about the best<br />

way to treat the child’s diarrhea.<br />

Teck is a diversified resource company committed to<br />

responsible mining and mineral development with major<br />

business units focused on copper, steelmaking coal, zinc,<br />

and energy. The pursuit of sustainability guides Teck’s<br />

approach to business. The company, which is based in<br />

Vancouver, Canada, is building partnerships and capacity to<br />

address sustainability challenges within the regions in which<br />

it operates and at the global level.<br />

As one of the world’s largest producers of<br />

zinc, Teck is committed to raising awareness<br />

about – and helping solve the global<br />

health issue of – zinc deficiency, thereby<br />

supporting UN Millennium Development<br />

Goal 4 to reduce child mortality by twothirds<br />

of 1990 levels by 2015.<br />

<strong>Global</strong> issue of zinc deficiency<br />

Zinc is an essential micronutrient for all<br />

living organisms that protects the body<br />

from illnesses and helps fight infections,<br />

yet 2 billion people around the world are<br />

not getting enough zinc through their<br />

diets. Tragically, nearly 450,000 children<br />

die every year from disorders related to<br />

zinc deficiency. In fact, more infants die<br />

from diarrhea-related diseases associated<br />

with zinc deficiency than from malaria,<br />

HIV/AIDS, and measles combined.<br />

According to the World Health Organization,<br />

zinc deficiency is one of the leading<br />

risk factors associated with diseases such<br />

as diarrhea, contributing to the deaths of<br />

800,000 people each year. Zinc deficiency<br />

is typically the result of inadequate dietary<br />

intake of zinc. The problem is<br />

particularly profound in the developing<br />

world, where most populations have<br />

plant-based diets that are low in zinc.<br />

Zinc, a product of mining, is particularly<br />

effective in treating diarrhea.<br />

Teck’s involvement<br />

The challenge the world faces is not to<br />

produce more zinc. It is getting zinc<br />

into the diets of people suffering from<br />

zinc deficiency. This requires education,<br />

better distribution networks, and<br />

greater awareness of the dangers of zinc<br />

deficiency. Under the leadership of Don<br />

Lindsay, President and CEO of Teck and<br />

former Chair of the <strong>International</strong> Zinc<br />

Association (IZA), Teck has been actively<br />

involved in working with international<br />

organizations to find solutions to the<br />

global issue of zinc deficiency.<br />

Zinc and health at Teck<br />

In 2011, Teck launched its Zinc and<br />

Health program, which now includes<br />

partnerships with UNICEF, Free the<br />

Children, The Micronutrient Initiative,<br />

the Government of Canada, BASF, the<br />

Ministry of Agriculture in China, and<br />

other organizations.<br />

Teck’s Zinc and Health program includes<br />

a range of initiatives aimed at increasing<br />

awareness about the dangers of zinc deficiency<br />

and helping save children’s lives.<br />

Awareness<br />

The company has engaged its own employees<br />

at offices and through operations<br />

around the world via a variety of<br />

initiatives, including lunch and learn<br />

sessions, a Zinc and Health newsletter,<br />

and a website, www.zincsaveslives.com,<br />

which includes an online store where all<br />

proceeds from the sale of Zinc and Health<br />

branded items go toward supporting zinc<br />

supplementation programs.<br />

Beyond internal awareness activities,<br />

Teck has partnered with Free the Children<br />

at We Day events across Canada.<br />

We Day is a day-long event developed<br />

to celebrate the power of young people<br />

to create positive change. It brings inspirational<br />

speeches and performances to<br />

young leaders in Canada, encouraging<br />

them to take action on local and international<br />

issues all year long. Students<br />

attending We Day events in 2011 learned<br />

about the importance of zinc for human<br />

health. Through Teck’s Zinc and Health<br />

materials, a short video, and a presentation<br />

by Don Lindsay, over 40,000 young<br />

people across Canada have been empowered<br />

to help solve the global health<br />

challenge of zinc deficiency.<br />

Supplementation<br />

In his capacity as Chair of the <strong>International</strong><br />

Zinc Association, Lindsay was<br />

actively involved in launching the Zinc<br />

Saves Kids campaign, an initiative of the<br />

IZA to improve the survival, growth, and<br />

development of undernourished children<br />

by funding UNICEF’s zinc supplementation<br />

programs around the world. Teck<br />

is providing resources to help increase<br />

the use of zinc supplements with a goal<br />

of saving more than 200,000 lives annually<br />

by 2015.<br />

In 2011, Teck partnered with the Micronutrient<br />

Initiative and the Government<br />

of Canada to establish the Zinc Alliance<br />

for Child Health. The public-private civil<br />

society alliance is committed to reducing<br />

child mortality by scaling up the use of<br />

zinc – combined with oral rehydration<br />

salts – to treat diarrhea and by providing<br />

zinc supplementation for children<br />

more than six months old. This approach<br />

is recognized as a high-impact solution<br />

that targets Canada’s G8 objectives of<br />

the Muskoka Initiative for child health,<br />

and helps in the efforts to meet the Millennium<br />

Development Goals.<br />

Food fortification<br />

In early <strong>2012</strong>, Teck announced at the<br />

World Economic Forum that they signed<br />

a three-year agreement with BASF to<br />

jointly develop innovative and affordable<br />

zinc fortification and supplementation<br />

solutions, with the goal of reducing<br />

zinc deficiency among 100 million<br />

people in developing countries by 2015.<br />

Through this agreement, BASF and Teck<br />

aim to make safe and cost-effective highquality<br />

food fortification supplements<br />

available to populations at risk of zinc<br />

deficiency in developing countries. This<br />

partnership forms part of the “Scalingup<br />

Nutrition” process and it aims to<br />

help meet the UN Millennium Development<br />

Goals, particularly the goal to<br />

halve poverty and hunger by 2015, by<br />

contributing to the realization of the<br />

Human Right to Food.<br />

Crop nutrition<br />

Zinc deficiency affects more than half<br />

of the world’s agricultural soils. It has a<br />

significant impact on crop productivity<br />

and may contribute to zinc deficiency<br />

among humans. Crop yield, food security,<br />

and nutritional quality can all be<br />

improved by ensuring that crops have<br />

an adequate supply of zinc. By achieving<br />

this, overall health and socioeconomic<br />

conditions in many developing countries<br />

can be improved drastically.<br />

With one of the world’s largest populations,<br />

China suffers from both land<br />

scarcity and micronutrient-deficient soils;<br />

approximately 61 percent of the arable<br />

land in China is deficient in zinc. To<br />

address this issue, Teck recently signed<br />

a two-year sponsorship agreement with<br />

the National Agricultural Technology<br />

Extension Service Centre of the Ministry<br />

of Agriculture of China (NATESC) to<br />

introduce and encourage the use of zinc<br />

fertilizers in China. Since March 2011,<br />

NATESC has been working with the IZA<br />

to carry out more than 40 field trials as<br />

well as promotional and education programs,<br />

including national workshops and<br />

training courses. The trials have resulted<br />

in increased crop yields, ranging from 3<br />

percent to 40 percent and a value-cost<br />

ratio as high as 5 to 15 times for farmers.<br />

This newly formalized agreement<br />

between Teck and NATESC will complement<br />

the work of the IZA to promote the<br />

use of zinc fertilizer in China.<br />

Teck’s Zinc and Health partnerships<br />

demonstrate how responsible businesses<br />

can take an active role and form working<br />

relationships with nonprofit organizations<br />

to help save the lives of children.<br />

To learn more about Teck’s Zinc and Health<br />

program, visit www.zincsaveslives.com.<br />

96 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

97


Best Practice<br />

Human Rights<br />

Tristar<br />

My First License – I Know<br />

My Road Rules<br />

Road accidents have become source of global concern. Whether you are a driver, passenger,<br />

or a pedestrian, your safety is at risk while using roads. According to the World Health<br />

Organization, road traffic accidents kill and injure millions of people every year – it is one<br />

of the top three causes of death globally. More startling is that the number of deaths and<br />

disabilities from road traffic accidents are increasing yearly, despite increased safety features<br />

in modern automobiles and improved road infrastructure.<br />

By Muhammad Akber<br />

It is projected that unless concrete measures<br />

are taken, the accident death toll<br />

will double by 2020. Those between<br />

the ages of 5 and 44 years are most vulnerable<br />

to road accidents, according to<br />

statistics. With the increasing number<br />

of accidents, awareness must be raised<br />

in society and people must be educated<br />

about road safety. One such initiative was<br />

undertaken by Tristar Transport LLC in<br />

collaboration with Total Middle East FZE.<br />

It is a fact that children retain habits<br />

that they learn in their formative years.<br />

Borrowing from this idea, a unique road<br />

safety campaign started by Tristar Transport<br />

LLC was aimed at educating young<br />

schoolchildren about road safety. The<br />

campaign was named “My First License<br />

– I Know My Road Rules.” Students aged<br />

4 to 8 years from various participating<br />

schools were targeted. Around 5,000 children<br />

benefitted from this campaign. Each<br />

session included a road safety lecture<br />

from experts followed by a road safety<br />

quiz. Since the campaign was aimed at<br />

familiarizing students about road safety<br />

rules, they had to drive a pedal car and<br />

follow all the basic rules as well as pay<br />

attention to road signs, crosswalks, traffic<br />

signals, and rotaries, thereby giving the<br />

young drivers of tomorrow a hands-on<br />

feel about what to expect when driving.<br />

There were even marshals in the field<br />

to manage the flow of pedal cars in the<br />

training hall.<br />

At the end of each session, each student<br />

was issued a plastic license bearing their<br />

photo, name, and the school’s name.<br />

The plastic license was endorsed by the<br />

Dubai Police – it obviously does not<br />

entitle them to drive, but it reminds<br />

them of their first lesson on road safety<br />

and builds a foundation for them to<br />

become safe drivers and promote road<br />

safety. A coloring booklet on road safety<br />

was also issued to students after each<br />

session to make them feel happy and<br />

motivated.<br />

The campaign “My First License – I<br />

Know My Road Rules” was met with a<br />

favorable reception from all involved<br />

and was a great success. The plastic license<br />

will remind children about the<br />

importance of road safety and make<br />

them more aware, thereby planting the<br />

seeds for a safer driving environment in<br />

the years to come.<br />

Statistics show that the majority of road<br />

accidents are the result of human behavior,<br />

despite technological advancements<br />

with modern vehicles and road infrastructure.<br />

Therefore, we must create<br />

awareness and a safety culture in road<br />

users to overcome this menace, which<br />

has become a global epidemic. As an<br />

active participant of the United Nation<br />

<strong>Global</strong> <strong>Compact</strong>, Tristar is committed<br />

to promoting road safety in the communities<br />

where we operate, and we will<br />

continue to offer similar initiatives for<br />

a safer tomorrow. The idea is to create<br />

a safe driving culture, wherein these<br />

children will broadcast the message to<br />

their friends, family, and society at large.<br />

We believe that such initiatives – if<br />

joined by other corporate members as<br />

well – will result in a reduced number<br />

of road accidents, injuries, and property<br />

damage, because these children will<br />

become safe drivers as grownups. This<br />

initiative was also recognized as a good<br />

practice – Tristar received the Arabia<br />

CSR Award under the Best Newcomer<br />

category in November 2011. We also<br />

recommend that road safety should<br />

be included as part of the curriculum<br />

for students so that we can instill safe<br />

driving habits in children from the<br />

very start.<br />

Project benefits<br />

Immediate benefits<br />

• The project succeeded in<br />

familiarizing young children with<br />

road safety rules and giving them a<br />

hands-on feel about what to expect<br />

when driving.<br />

• It helped in building a strong<br />

foundation for becoming safe<br />

drivers and promoting road safety<br />

because children retain habits that<br />

they learn in their formative years.<br />

• A coloring booklet and plastic<br />

license on road safety were also<br />

issued to students to create interest<br />

in road safety.<br />

Long-term benefits<br />

• Reduction in number of road<br />

accidents, injuries, and property<br />

damage because these children will<br />

be safer drivers as grownups.<br />

• Creating a safe driving culture,<br />

wherein these children will<br />

broadcast the message to their<br />

friends, family, and society at large.<br />

98 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

99


Best Practice<br />

Labour Standards<br />

Bosch<br />

Diversity – A<br />

Success Factor<br />

for Bosch<br />

By Heidi Stock and Annkathrin Kienle<br />

People in over 150 countries all around the world –<br />

including men and women of many different backgrounds,<br />

individual lifestyles, and generations – are working for<br />

Bosch. This diversity brings real benefits for our company,<br />

and it is essential for our successful business performance in<br />

the long term. Numerous studies have shown that increased<br />

diversity leads to more innovation, better problem-solving,<br />

and greater creativity.<br />

Gender<br />

Diversity<br />

Generations<br />

<strong>International</strong>ities<br />

Working<br />

Cultures<br />

For that reason, diversity is anchored in<br />

our Bosch values as a key success factor,<br />

is recognized as an asset for Bosch, and<br />

forms an integral part of many of our<br />

processes. Bosch committed itself to<br />

the topic in public in December 2007<br />

by becoming one of the first German<br />

companies to sign the German “Diversity<br />

Charter,” wherein companies officially<br />

undertake a commitment to recognize,<br />

value, and appreciate diversity.<br />

To further strengthen diversity<br />

within Bosch and to use this as a positive<br />

force for its sustainable economic success,<br />

the Board of Management established a<br />

“Diversity” project group in 2011, tasked<br />

with making diversity management an<br />

integral part of the corporate strategy.<br />

Bosch has decided to focus on four aspects<br />

of diversity: Gender, Generations,<br />

<strong>International</strong>ities and Working Cultures.<br />

Diversity is not just a management<br />

issue – because the success of Bosch<br />

depends on each and every one of us<br />

The ability to embrace different experiences,<br />

leadership styles, work approaches,<br />

and ways of thinking has become part<br />

Our Diversity<br />

Vision<br />

We are a global company<br />

manufacturing quality innovative<br />

and sustainable products<br />

and services in the fields of<br />

automotive technology, consumer<br />

goods, and industrial technology.<br />

We have an open and knowledgehungry<br />

workforce that is diverse<br />

and can rely on courageous,<br />

reliable, and responsible<br />

management. We emphasize the<br />

values of self-reflection, valuing<br />

differences, and conscious lateral<br />

thinking.<br />

of the Bosch tradition and changed the<br />

way we see ourselves. This diversity is<br />

also playing an ever larger part in our<br />

daily work environment. Every day, we<br />

deal with various tasks, situations, and<br />

people, both internally and externally,<br />

on international markets. And this trend<br />

is going to increase.<br />

Our internal Diversity Communication<br />

initiative invites associates at over<br />

200 locations all around the world to<br />

discover the world of diversity within<br />

Bosch. It promotes an even stronger<br />

focus on actively building diversity into<br />

the day-to-day work environment on the<br />

basis of cooperation and mutual respect<br />

between men and women as well as<br />

different generations, nationalities, and<br />

working cultures.<br />

One of our objectives is to increase<br />

the proportion of women in management<br />

positions from the present figure<br />

of over 11 percent to an ambitious target<br />

of 20 percent by the end of 2020. Bosch is<br />

therefore putting a high priority on the<br />

recruitment and retention of qualified<br />

female associates and the promotion<br />

of women already on the staff. Within<br />

our special training program the “Business<br />

Women’s Program,” Bosch offers a<br />

range of seminars as well as mentoring<br />

programs to future female senior managers<br />

and specialists.<br />

<strong>International</strong>ity has also long been<br />

an important part of the Bosch culture,<br />

including international assignments,<br />

language courses, cross-cultural training<br />

courses, and the integration of a wide<br />

range of “cultural profiles,” to support<br />

our associates in their varied interactions<br />

with colleagues, customers, and business<br />

partners from different countries.<br />

Another dimension of diversity relates<br />

to “demographic change,” focussing<br />

on the successful working relationships<br />

across different generations. Both men<br />

and women are required to remain in<br />

the workforce longer, particularly in<br />

Europe. Lifetime learning, “mature”<br />

careers, effective health management,<br />

and systematic know-how transfer have<br />

therefore become key challenges for<br />

many companies today. Bosch is also<br />

keen on not losing the know-how of its<br />

highly motivated older associates, e.g.<br />

by gaining them as consultants during<br />

their retirement and therefore keeping<br />

their expertise within Bosch. Over 500<br />

former associates around the world currently<br />

benefit from this option.<br />

To achieve the inclusion of diversity,<br />

we also need the right working culture –<br />

one that includes flexible working hours<br />

instead of a culture of presence, and<br />

one that offers a better balance between<br />

family and career, for both men and women.<br />

In the company-wide project MORE<br />

(Mindset ORganization Executives), 150<br />

executives are currently experimenting<br />

with flexible working hours arrangements,<br />

using the time gained in this way to focus<br />

on their personal development, families,<br />

and their own interests. Others decide to<br />

take some “time out” to reflect on strategic<br />

issues, away from their workstations and<br />

office routines. The results have been<br />

excellent! Simply by daring to take the<br />

first step, the initial barriers have been<br />

successfully overcome. In a contemporary<br />

work environment with a mix of<br />

technology, effective organization, and<br />

teamwork, associates are able to work<br />

effectively without having to be present<br />

every minute of every working day.<br />

We can see: Bosch is concentrating<br />

on this topic. That comes as no surprise<br />

given the active involvement of the Board<br />

of Management and Bosch executives<br />

Diversity<br />

in general, who are promoting activities<br />

ranging from briefing events to a<br />

comprehensive diversity qualification<br />

concept. Management attitudes toward<br />

understanding diversity within the company<br />

have also been communicated in<br />

a series of videos. Each of us can play a<br />

part in expressing the Bosch concept of<br />

diversity because the Bosch success story is<br />

ultimately being written by an incredibly<br />

diverse group of people – including over<br />

300,000 Bosch associates, in locations all<br />

around the world.<br />

Diversity within Bosch as the answer<br />

to an increasingly diverse world<br />

“Diversity at Bosch has many different<br />

facets,” explains Christoph Kübel, Member<br />

of the Board of Management. “We<br />

have huge diversity among our products,<br />

our customers, our markets, and our associates,<br />

and that is just how it should<br />

be – because this enables us to respond<br />

to the diverse expectations and requirements<br />

of our customers and our markets<br />

worldwide. At the end of the day, we<br />

need the right skills and competencies<br />

at the right location.”<br />

A conceptual approach based on<br />

diversity fosters open, constructive, and<br />

creative interactions within the company.<br />

And this constructive, open style<br />

of interaction provides the foundation<br />

for great ideas and the company’s success.<br />

As our slogan “Bosch – invented<br />

for life” implies, we are looking for a<br />

diverse range of solutions rather than<br />

just one specific answer.<br />

We are therefore committed to continuing<br />

on our successful path, because:<br />

Diversity is the key to our success. Diversity<br />

leads to more innovation and greater<br />

creativity. Diversity is our advantage.<br />

100 <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong> <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2012</strong><br />

101


Best Practice<br />

Labour Standards<br />

ManpowerGroup<br />

Making it Humanly Possible<br />

for Young People to<br />

Succeed<br />

<strong>Global</strong> youth unemployment stands at record levels and significantly outstrips that of<br />

joblessness rates for other age groups. Everywhere you look, the numbers are deeply<br />

troubling. The latest statistics from the <strong>International</strong> Labour Organization put the global<br />

youth unemployment rate at more than 81 million workers – 40 percent of the total<br />

unemployed. The developing world, with generally younger populations, is disproportionately<br />

affected. According to the ILO, the highest regional youth unemployment rates exist in the<br />

Middle East and North Africa, where close to one out of every four young people are out of<br />

work.<br />

By Jeffrey A. Joerres<br />

Widespread youth joblessness has many<br />

negative consequences, including the<br />

societal problems connected with idle<br />

youth who do not finding meaningful<br />

work, the undermining of traditional<br />

stabilizers such as families and social<br />

communities, and rising criminal activity.<br />

At its heart, work is honorable and plays<br />

a critical role in the lives of individuals.<br />

The absence of job opportunities weakens<br />

society at its most fundamental level.<br />

Moreover, deep and structural unemployment<br />

among young people has serious<br />

economic ramifications.<br />

The world cannot afford to lose an entire<br />

generation of talent. There is a growing<br />

chasm between the skills being offered<br />

by workers and those being sought by<br />

employers, with ManpowerGroup’s latest<br />

annual Talent Shortage Survey showing<br />

34 percent of employers worldwide are<br />

having difficulty filling vacancies. There<br />

is an oversupply of available candidates<br />

and a lack of available talent. This hampers<br />

national economies and opportu-<br />

nities for development, and threatens<br />

global economic and social recovery. Our<br />

Talent Shortage Survey cited key reasons<br />

employers cannot or will not hire, including:<br />

a lack of experience, technical<br />

skills deficiencies, and poor employability<br />

skills among available candidates. Lack<br />

of experience is clearly an infuriating<br />

dilemma for young people, who cannot<br />

hope to gain experience when they are<br />

not given the chance to apply schoolbased<br />

skills in a workplace setting. With<br />

the uncertainty in the global economy,<br />

many employers are unwilling to gamble<br />

on inexperienced candidates and to invest<br />

resources in training young people when<br />

more experienced workers are available.<br />

Young people often lack specific employability<br />

skills such as cooperation, communication,<br />

critical thinking, creativity,<br />

and collaboration. Collaboration is the<br />

answer to this widespread and growing<br />

social problem; it requires creative<br />

holistic strategies with buy-ins from<br />

governments, businesses, educational<br />

institutions, and young people themselves.<br />

ManpowerGroup’s core business is<br />

connecting people with opportunities for<br />

employment, and I am pleased to share<br />

with you some of the many ways that we<br />

are working with all stakeholders around<br />

the world to help young people unleash<br />

their human potential. In the end, you<br />

will notice a common theme – it is<br />

about Employment security, experience,<br />

gaining honor and confidence, as well<br />

as creating an iterative model of work<br />

experience and education.<br />

ManpowerGroup Colombia’s Jóvenes<br />

Visionarios (Visionary Young People)<br />

program – in partnership with the <strong>International</strong><br />

Labour Organization, the<br />

<strong>International</strong> Organization of Migration,<br />

NGOs, and the private sector – assists<br />

unemployed youth who lack training<br />

opportunities. It targets young people<br />

under 18 years of age, and participants<br />

gain access to training facilities, equipment,<br />

instructors, courses, vocational<br />

assessments, and career guidance. This<br />

project has assisted almost 400 people<br />

in enhancing their employability.<br />

In the Arab world, ManpowerGroup<br />

is currently collaborating with INJAZ<br />

al-Arab to help build an Arab Youth<br />

Portal – a future online platform for the<br />

delivery of e-learning and job-matching<br />

to promote youth employability and<br />

entrepreneurship. The Arab Youth Portal<br />

also connects young people with each<br />

other, mentors, and potential sources<br />

of capital in order to combat youth<br />

exclusion. INJAZ operates in 14 countries,<br />

reaching 200,000 youth annually.<br />

Thousands of private sector volunteers,<br />

including hundreds of CEOs from leading<br />

Arab companies, have worked with<br />

university and high-school students to<br />

develop their 21st-century skill sets.<br />

ManpowerGroup has a long-standing<br />

partnership with Junior Achievement,<br />

the world’s largest organization dedicated<br />

to educating students about workforce<br />

readiness, entrepreneurship, and financial<br />

literacy through experiential, handson<br />

programs. In the United States, Junior<br />

Achievement programs reach more than<br />

4 million students per year in more than<br />

176,000 classrooms. ManpowerGroup<br />

is a sponsor of Junior Achievement’s<br />

new “Success Skills” work-readiness curriculum.<br />

During the 2010 / 2011 school<br />

year, 227 ManpowerGroup classroom<br />

volunteers presented Junior Achievement<br />

programs to 7,000 students in the<br />

United States. Over the past three years,<br />

the “Success Skills” curriculum has been<br />

given to more than 45,000 students in<br />

20 countries.<br />

In France, ManpowerGroup’s assistance<br />

to the national government’s unemployment<br />

program focuses on “hard-to-serve”<br />

candidates, including disconnected<br />

youth. Our Placement program envisions<br />

the path to meaningful employment as<br />

a series of progressive steps. The first is a<br />

rapid return to work and may include a<br />

short-term assignment. This is a key step<br />

in improving candidates’ confidence and<br />

motivation and establishing a portfolio of<br />

relevant work experience. The program<br />

serves about 5,000 persons per year, and<br />

more than 65 percent are successfully<br />

placed in long-term employment.<br />

ManpowerGroup works with many other<br />

institutions, too. We are leveraging our<br />

insight and expertise in the world of<br />

work to press for action at the highest<br />

level. As a member of the World Economic<br />

Forum <strong>Global</strong> Agenda Council<br />

on Youth Unemployment, Manpower-<br />

Group has addressed key influencers and<br />

decision-makers to strategize targeted<br />

responses.<br />

I co-chaired the World Economic Forum<br />

on Latin America in Mexico in April. This<br />

summit focused on key employment<br />

issues for the region, including how to<br />

leverage growing and youthful populations<br />

to improve talent pipelines at a<br />

time when the global balance of power<br />

is shifting toward emerging markets.<br />

This also involved recommending outputs<br />

to the President of Mexico, Felipe<br />

Calderon Hinojosa, as part of the B20<br />

Task Force on Employment, which I<br />

am co-chairing, and will culminate in<br />

delivering recommendations for the<br />

G20 summit in Mexico later this year.<br />

In 2010, ManpowerGroup was given<br />

the opportunity to testify before a hearing<br />

of the US Congress Joint Economic<br />

Committee focusing on the labor market<br />

and policies to foster economic growth<br />

and job creation. I recommended that<br />

a comprehensive program be developed<br />

to support entrepreneurs to set up and<br />

establish new businesses.<br />

Employers have a direct interest in making<br />

investments that will improve young<br />

people's ability to succeed in the World<br />

of Work. These investments can take<br />

many forms, ranging from volunteering<br />

in schools to engagement in training-toemployment<br />

or work experience programs,<br />

to improve the employability<br />

skills of youth. In all world regions it's<br />

clear that employers are needed to lead<br />

initiatives that unleash youth potential<br />

in the workplace. Manpower-Group urges<br />

all employers to step up and make a<br />

difference.<br />

Jeff Joerres is Chairman and CEO of<br />

ManpowerGroup.<br />

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Best Practice<br />

Environment<br />

106<br />

108<br />

112<br />

114<br />

116<br />

118<br />

120<br />

122<br />

124<br />

128<br />

130<br />

132<br />

Air France-KLM<br />

BASF<br />

Bayer<br />

BSH Bosch und Siemens Hausgeräte<br />

Consolidated Contractors Company<br />

Deutsche Telekom<br />

Essent<br />

Guangxi Beihai Penshibao<br />

MAN<br />

Metso<br />

MTN<br />

Vestas<br />

Environment<br />

Anti-Corruption<br />

Principle 7: Businesses should support a precautionary<br />

approach to environmental challenges;<br />

Principle 8: undertake initiatives to promote greater<br />

environmental responsibility; and<br />

Principle 9: encourage the development and diffusion of<br />

environmentally friendly technologies.<br />

Principle 10: Businesses should work against corruption<br />

in all its forms, including extortion and bribery.<br />

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105


Best Practice<br />

Environment<br />

AIR FRANCE-KLM<br />

RECONCILING AIR TRAFFIC<br />

GROWTH WITH CLIMATE<br />

PROTECTION<br />

The aviation industry’s share of global emissions of anthropogenic CO 2<br />

is around 2 percent,<br />

which is partly due to the continued growth of air transport. Since 2007, Air France-KLM<br />

has been implementing a “climate plan” – a strategy to aggregate the actions already<br />

undertaken within the Group in addition to further actions to fight climate change.<br />

The increased use of fossil fuels is threatening<br />

the climate balance. Awareness is<br />

global, but the use of these fuels in areas<br />

such as industry, transport, and housing<br />

is often unavoidable.<br />

Faced with this global challenge to reduce<br />

CO 2<br />

emissions, only a global response<br />

can be effective. That is why Air France-<br />

KLM has been working for the past few<br />

years with international bodies such as<br />

AEA,the IATA*and ICAO to mobilize the<br />

airline industry on this important topic.<br />

The Group also takes part in research<br />

programs in aeronautics and actively<br />

supports the development of solutions<br />

for the use of sustainable alternative fuels.<br />

To reduce its own environmental impacts,<br />

Air France-KLM has already implemented<br />

*IATA – <strong>International</strong> Air Transport Association;<br />

ICAO – <strong>International</strong> Civil<br />

Aviation Organization; AEA – Association<br />

of European Airlines<br />

several measures: the ongoing modernization<br />

of its fleet (which emits less CO 2<br />

and is one of the youngest in Europe),<br />

introducing new piloting procedures,<br />

and reducing on-board weight, for example.<br />

These actions have produced very<br />

satisfactory results. In the space of four<br />

years, Air France has reduced its fuel<br />

consumption per passenger by almost 4<br />

percent, and reduced CO 2<br />

emissions by<br />

27 percent compared with 2005. But to<br />

reduce CO 2<br />

emissions further, sustainable<br />

biofuels are a promising solution.<br />

For Air France-KLM, developing an alternative<br />

to fossil fuels that is sustainable<br />

and emits less CO 2<br />

has become a<br />

priority. Since 2008, Air France-KLM<br />

has been involved in many French and<br />

European programs to develop and use<br />

biofuels under conditions that respect<br />

the environment and promote economic<br />

and social development.<br />

The year 2011 marked a milestone: Air<br />

France and KLM operated the world’s first<br />

two commercial flights using sustainable<br />

biofuels and no changes to the engines<br />

were required.<br />

In June, KLM made its first flight with<br />

sustainable biofuel between Paris and<br />

Amsterdam; from September to February<br />

<strong>2012</strong>, another 200 commercial flights<br />

were conducted.<br />

In October, Air France operated the most<br />

efficient commercial flight, which was<br />

between Toulouse and Paris, regarding<br />

CO 2<br />

emissions and the use of sustainable<br />

biofuel. The flight chose the shortest<br />

path, an optimum flight profile, and<br />

taxied with one engine turned off. The<br />

weight of the cabin equipment has decreased<br />

by 15 percent over 5 years –<br />

every kilo saved represents a saving of 75<br />

tons of CO 2<br />

per year for the entire fleet.<br />

Thanks to all these measures, CO 2<br />

emissions<br />

on this flight were reduced by 50<br />

percent compared to a traditional flight.<br />

So why do we not make this type of flight<br />

standard? Some ways to create savings<br />

have already been implemented on all<br />

or parts of the fleet (fuel-efficient pilot<br />

procedures, less weight on board, etc).<br />

Other ways require new international<br />

regulations regarding the environment<br />

or airspace as well as the industrial<br />

production of biofuels for the aviation<br />

industry.<br />

In 2011, the European Commission, Airbus,<br />

the biofuel production industries,<br />

and four airlines, including Air France<br />

and KLM, launched programs aimed at<br />

the production in Europe of 2 million<br />

tons of sustainable biofuel for aviation<br />

by 2020. This program also commits each<br />

actor to promote the production, distribution,<br />

storage, and use of biofuels from<br />

certified sustainable production. This<br />

objective requires establishing effective<br />

and appropriate financial mechanisms<br />

to support the construction of the first<br />

industrial production plants.<br />

Furthermore, Air France and KLM are<br />

open to the use of different raw materials,<br />

in that they meet sustainability<br />

criteria that are recognized worldwide.<br />

For example, their use should generate<br />

reductions of CO 2<br />

emissions and not<br />

have substantial negative impacts on<br />

the food supply, biodiversity, or forests.<br />

In this way, Air France is supporting an<br />

innovative project to produce biofuels<br />

from forest waste. In 2015, a part of this<br />

production (2,000 tons per year) should<br />

be available to power aircraft engines. Air<br />

France will take a stake in the company<br />

responsible for the industrialization of<br />

this production.<br />

A proven commitment<br />

Every year, the Group is evaluated by<br />

major international ratings agencies. For<br />

the seventh consecutive year, the Group<br />

was ranked a leader among airlines by<br />

both the Dow Jones Index and for the<br />

third year running was ranked “Super<br />

Sector Leader” in the extended “travel<br />

and leisure” sector.<br />

For more information, please visit<br />

the following websites:<br />

www.corporate.airfrance.com<br />

www.klm.com<br />

HOW DO SUSTAINABLE BIOFUELS REDUCE OUR<br />

CARBON IMPACT?<br />

For growth, plants absorb CO 2<br />

, which is available in the atmosphere.<br />

Using biofuel made ​from plants, the aircraft only re-emit this CO 2<br />

into the<br />

atmosphere, unlike oil, whose use releases CO 2<br />

buried underground and<br />

therefore increases the volume in the air. The use of biofuels allows for a<br />

CO 2<br />

reduction of up to 80 per cent compared to a fossil fuel (according to a<br />

Michigan Technological University study from 2009 on the lifecycle of biofuels –<br />

growing, harvesting, processing, and end-use).<br />

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Best Practice<br />

Environment<br />

BASF<br />

The Argan Program in<br />

Morocco<br />

By Raquel Ark, Charlotte d’Erceville, Viola Möller, and Anne-Laurie Rodrigues<br />

With the integration of Cognis and its active ingredients business, Laboratoires<br />

Sérobiologiques (LS), BASF has broadened its product portfolio based on renewable raw<br />

materials in the last years. One of renewable raw materials is Argan oil from Morocco.<br />

In close partnership with L’Oréal, the<br />

former LS organization – which has now<br />

become part of BASF Care Chemicals actives<br />

business – established a pioneering<br />

tripartite approach in 2008 for a greater<br />

commitment to sustainability and to<br />

foster corporate social responsibility in<br />

the Argan supply chain. As part of its<br />

Argan oil sourcing, LS* has taken a voluntary<br />

approach to sustainability. This<br />

approach contributes to the objectives of<br />

the Convention on Biological Diversity<br />

and ensures a fair return (fair price and<br />

capacity enhancement) by enabling cooperatives<br />

to gradually achieve economic<br />

empowerment through the sustainable<br />

use of natural resources.<br />

Sustainable sourcing of new raw<br />

materials<br />

Continuously looking for new plants<br />

that can be used in the development<br />

of innovative active ingredients for the<br />

cosmetic industry, LS began to study<br />

the local ecosystem in Morocco in 2001<br />

and the Argan tree in particular. Experts<br />

identified new uses for extracts from<br />

parts of the Argan tree that had previously<br />

not been known or used for such<br />

cosmetic applications.<br />

To take into consideration traditional<br />

knowledge and local expertise, a partnership<br />

was set up between LS and Zoubida<br />

Charrouf, a professor at Rabat’s Mohamed<br />

V University and the founder of<br />

the Targanine cooperative network. The<br />

long-term goal was to combine scientific<br />

innovation, commercial development of<br />

the Argan sector in Morocco, and certain<br />

sustainability principles specific to the<br />

requirements of the region and the Argan<br />

supply chain. Key elements included<br />

diversification of local revenues, the<br />

protection of the Argan forest, and the<br />

support of local cooperative members.<br />

*Former LS organization – now part of<br />

BASF Care Chemicals actives business<br />

A further step toward sustainability<br />

of the supply chain<br />

The raw materials, Argan oil, and other<br />

Argan products (such as pressed oil-cake<br />

and Argan leaves) are supplied through<br />

the Targanine network of cooperatives,<br />

which employs a mainly female workforce,<br />

leading to a larger number of<br />

women being integrated into Moroccan<br />

society. Products are purchased specifically<br />

from Targanine cooperatives set up<br />

in conjunction with Zoubida Charrouf,<br />

with the intention of not only providing<br />

employment but also creating shared<br />

ownership of the cooperative and shared<br />

decision making. This process helps to<br />

empower previously unemployed Berber<br />

women.<br />

However, LS was committed to making<br />

the supply chain for its Argan products<br />

even more sustainable and equitable,<br />

exceeding the requirements of some<br />

organic certifications and fair trade labels.<br />

To this end, it implemented a comprehensive<br />

CSR program in collaboration<br />

with L’Oréal and Yamana, an NGO known<br />

for the CSR structuring of the textile<br />

industry.<br />

To get a fair understanding of all parties’<br />

needs and perceptions, Yamana<br />

conducted interviews with various<br />

stakeholders at all the different stages<br />

of the supply chain in order to form<br />

a holistic and detailed picture of the<br />

situation. This input has been very<br />

important to ensure that the process<br />

is legitimate, effective, and consistent<br />

with the local context.<br />

An 18-month-long program was initiated<br />

in June 2008 to propose relevant and<br />

realistic improvement measures in the<br />

following areas:<br />

Fair return to the local community:<br />

going above and beyond the minimum<br />

requirement expected to pay with fair<br />

prices on fair terms. The program looked<br />

at ways to ensure decent living conditions<br />

and improvements in quality<br />

of life. Non-monetary benefits were<br />

“This pioneering CSR partnership<br />

between a consumer goods<br />

company, a raw material supplier,<br />

and an NGO, for a multiple<br />

stakeholder commitment, is<br />

quite without precedent. It is<br />

an ongoing process, where we<br />

are already have been seeing<br />

satisfying results. Our local<br />

partners have continually reached<br />

a higher level of autonomy and<br />

independence, and as we have all<br />

worked together, we have made<br />

continued strategic progress<br />

while respecting the needs<br />

of local communities and the<br />

environment.”<br />

Charlotte d’Erceville, R&D Data and<br />

Sustainable Development Manager,<br />

BASF Care Chemicals actives business<br />

“All organizations involved have<br />

a relationship built on trust,<br />

sincerity, and transparency – and<br />

this has made possible the<br />

implementation of a healthy<br />

long-term CSR structure. LS*<br />

and L’Oréal trusted Yamana’s<br />

method and recognized the<br />

necessity of a holistic approach<br />

that included auditing, monitoring,<br />

and supporting suppliers, as<br />

well as commercial and quality<br />

assurance activities.”<br />

Eric Defrenne, Yamana National<br />

Coordinator<br />

“I have worked in the cooperative<br />

since its creation in 2004. As<br />

treasurer and cashier, I write<br />

the checks among other things.<br />

Previously, I was at home with no<br />

paid work, only the daily family<br />

tasks. The money I earn allows<br />

me to help my children at school.<br />

Schooling is free, but we have<br />

to buy pens, school books, etc.<br />

We live in a very poor area. My<br />

husband has a job too, but that<br />

alone is not always sufficient.”<br />

Fatima, treasurer and<br />

cashier of the Toudarte cooperative<br />

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Best Practice<br />

Environment<br />

BASF<br />

“I used to stay at home; I never<br />

had a job before. The cooperative<br />

allows me to earn a regular<br />

income by myself. It also helps<br />

us to buy goods we need, by<br />

providing a transportation van that<br />

sometimes runs free errands for<br />

the women – the range of things<br />

we can buy in the douar [village]<br />

is very limited. Life at home is<br />

different, because we have easier<br />

access to water and electricity. My<br />

husband is ill and cannot work.”<br />

Zaima, member of the Toudarte<br />

cooperative<br />

It was the first time L'Oréal<br />

Research & Innovation established<br />

a tripartite agreement with a<br />

supplier and a NGO. We went<br />

beyond the technical & trade<br />

discussion with our supplier and<br />

designed together a long term<br />

program, precisely adapted to<br />

the argan sector specificities,<br />

taking fully into account local<br />

expectations. The NGO Yamana’s<br />

know-how and dialogue<br />

experience with stakeholders was<br />

a key factor of success for this<br />

project. Considering the progress<br />

achieved, we went further than<br />

the simple purchase of argan<br />

oil to the cooperatives, and we<br />

gradually decided to reference 3<br />

additional ingredients developed<br />

by BASF from the argan tree :<br />

leaves extract in 2009, cake oil<br />

extract in 2010 and the shellnut<br />

powder in 2011. Currrently, Argan<br />

is internationally present in more<br />

than 15 brands of the L’Oreal<br />

group : GARNIER, L'ORÉAL<br />

PARIS, LANCÔME, L'ORÉAL<br />

professionnel , Yves Saint Laurent,<br />

REDKEN, Helena Rubinstein,<br />

KÉRASTASE, KIEHL'S, LASCAD<br />

and in every product categories:<br />

skincare , haircare and make-up<br />

products.<br />

Rachel Barré, L’Oréal Research and<br />

Innovation - Sustainability Manager<br />

also considered, such as participation<br />

in training programs or health insurance<br />

for cooperative members. Besides<br />

promoting a better quality of life, the<br />

aim is to contribute to the overall economic<br />

and social development of the<br />

area. The Targanine cooperatives in Morocco<br />

supply Argan oil (and other Argan<br />

products, such as pressed oil-cake and<br />

Argan leaves) to BASF under fair trade<br />

conditions, whereby the company pays<br />

a fixed premium price for the product<br />

in advance (such as a two-year contract<br />

for the supply of oil). Of the total price<br />

paid for each kilogram of oil-cake, approximately<br />

50 percent is provided in<br />

the form of a social fund for each cooperative;<br />

25 percent is given to the<br />

Targanine Economic Interest Group for<br />

maintenance costs, machinery, investment,<br />

and management; and 25 percent<br />

is given to the cooperative (which is used<br />

indirectly for incomes).<br />

Non-monetary benefits:<br />

In addition to literacy classes and professional<br />

training, educational programs<br />

relating to environmental protection<br />

have also been introduced by international<br />

stakeholders. As a result, network<br />

members understand the importance<br />

of the Argan tree better and are more<br />

involved in its conservation. Increased<br />

financial autonomy and decision-making<br />

power for female workers has helped to<br />

raise the social status of the cooperatives’<br />

women in this rural environment.<br />

Traceability:<br />

By making Argan leaves traceable, for<br />

example, it is possible to monitor compliance<br />

with good collection practices<br />

that are necessary for the long-term<br />

preservation of biomass.<br />

Respect for traditional knowledge related to<br />

local biodiversity:<br />

The aim was to better understand local<br />

perceptions of patent rights relating<br />

to indigenous local flora. Even where<br />

products had been granted patents because<br />

of their novelty and inventiveness,<br />

third-party evaluation and assessment<br />

of local perceptions can help to better<br />

guarantee that traditional knowledge is<br />

respected. When applying for patents,<br />

LS recognized its local partner, Zoubida<br />

Charrouf, as co-inventor of new uses for<br />

Argan fractions previously never used in<br />

cosmetic applications, thereby making<br />

sure that traditional knowledge and<br />

geographical origin were documented<br />

and respected.<br />

Yamana was given the task of checking<br />

what impact patents have on the economic<br />

activity and general functioning<br />

of the sector as well as examining local<br />

people’s perceptions about how the<br />

patents influence their monetary and<br />

non-monetary returns. These interviews<br />

revealed local perceptions to be neutral<br />

and positive about the impacts of LS<br />

activity on the economic and social<br />

development.<br />

Protection of the biodiversity:<br />

To ensure the conservation of biodiversity,<br />

strict guidelines are followed<br />

during the harvesting and exploitation<br />

of natural Argan resources to help conserve<br />

the Argan forest. The supply chain<br />

also safeguards that the Argan products<br />

are cultivated and harvested in an environmentally<br />

sound way. Argan oil<br />

and Argan oil-cakes have been certified<br />

by Ecocert as being 100 percent from<br />

organic farming.<br />

Local empowerment:<br />

had the goal of increasing communities’<br />

autonomy and sense of responsibility<br />

by training employees in technical processes,<br />

quality control, accounting, and<br />

communication.<br />

Through their partnership with Yamana,<br />

LS and L’Oréal were involved in the<br />

implementation of a pilot program<br />

that manages the mentioned social<br />

fund. The social fund of each Targanine<br />

cooperative receives 50 percent of the<br />

pressed oil-cake payment, and so far<br />

has been spent on things like spectacles,<br />

literacy programs, and hygiene-related<br />

products such as clothes, washing machines,<br />

and pharmaceuticals. Some<br />

cooperatives have spent the fund on<br />

health insurance to cover the women<br />

and their families.<br />

As required for fair trade certification, a<br />

development fund monitored by the Economic<br />

Interest Group receives a premium<br />

equal to 5 percent of the oil payment to<br />

finance social or technical investments.<br />

Yamana was involved in initiating a<br />

Policies and Procedures manual for the<br />

cooperatives that was then translated<br />

in Arabic language. The manual sets<br />

clear rules for members, similar to a CSR<br />

code of conduct. This increases the cooperatives’<br />

autonomy and sense of social<br />

responsibility – a vital part of efforts to<br />

set up a sustainable organization that<br />

complies with broad CSR rules. The Policies<br />

and Procedures manual formalizes<br />

the cooperatives’ CSR processes. It covers<br />

various aspects, including: a democratic<br />

governance approach, transparency,<br />

and equitability between cooperatives;<br />

monitoring of benefit allocation; supply<br />

conditions; quality guidelines; and social<br />

and non-monetary benefits.<br />

Also quality, safety, and hygiene guidelines<br />

have been implemented in order<br />

to improve working conditions in the<br />

cooperatives. BASF continues to provide<br />

technical assistance on a regular<br />

basis. This empowers local workers in<br />

the areas of production, planning, and<br />

quality assurance. The cooperatives also<br />

share best practices and learnings among<br />

themselves to ensure continuous improvement.<br />

The cosmetic industry has felt the benefits<br />

of globalization for many years now.<br />

This has led to an exchange of ideas<br />

between different regions and increased<br />

access to exotic materials. As a responsible<br />

company, BASF finds it important<br />

to pay attention to sustainability on a<br />

global level, including environmental<br />

protection, respect of traditional knowhow,<br />

but also a fair sharing of profits. The<br />

only way to protect biodiversity – and<br />

our shared heritage – is by working<br />

closely alongside local communities.<br />

The Argan forest<br />

The Argan tree (Argania spinosa<br />

(L.) Skeels) is indigenous to<br />

southern Morocco. It is largely<br />

found in the southeast of Essaouira<br />

on the Souss plain. The Argan<br />

forest extends over approximately<br />

800,000 hectares and contains<br />

more than 20 million trees. It<br />

acts as a natural barrier against<br />

the advance of the neighboring<br />

Sahara Desert. The fruit of the tree<br />

contains a very hard shell, holding<br />

between one and three kernels,<br />

from which a valuable oil can be<br />

extracted.<br />

The Argan forest is extremely<br />

important in socioeconomic<br />

terms, as it supports more than<br />

3 million people (out of a total<br />

Moroccan population of more than<br />

30 million). Unfortunately, it is in<br />

decline as a result of changes to<br />

rural lifestyles. Overexploitation,<br />

soil erosion, and desertification<br />

have all played a part – as a<br />

result, UNESCO classified the<br />

Argan forest as a biosphere<br />

reserve in 1998. This designation<br />

is given to selected inland and<br />

coastal ecosystems where<br />

modern development can be<br />

reconciled with the conservation of<br />

biodiversity in practical ways.<br />

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Best Practice<br />

Environment<br />

Bayer<br />

Making Responsible Use of<br />

a Scarce Resource: Water<br />

By Dr. Wolfgang Grosse Entrup<br />

duced susceptibility to stress through<br />

heat or lack of water.<br />

Another example is in Indonesia, where<br />

we have forged partnerships with farmers<br />

and are cooperating with representatives<br />

from local authorities. Together we are<br />

converting production in suitable areas<br />

– from planted rice to direct seeding with<br />

pre-germinated rice. We ourselves provide<br />

seed, sowing machines, pesticides, and<br />

training on sustainable agricultural practices.<br />

The result is a 10 percent increase<br />

in rice crop yields – and a 30 percent<br />

decrease in water consumption and emissions<br />

of climate-damaging methane gases.<br />

A new rice seeding technology reduces water<br />

consumption by 30 percent.<br />

The globe today faces a series of major challenges: How can we safeguard high-quality food<br />

and good healthcare? How can we tackle climate change and save resources? How can we<br />

provide as many people as possible with access to clean water? All these central questions,<br />

reinforced by the steady growth of the world population, have a direct impact on the Bayer<br />

Group. This is because healthcare, nutrition, and materials used for many daily life products<br />

are our core business, including contributions to climate protection and resource efficiency.<br />

I am convinced that holistic approaches and innovative solutions are the key to coping with<br />

such global challenges and to finding the right balance between economic growth, social<br />

welfare, and environmental stewardship. At least this is what we are striving for at Bayer.<br />

Access to the valuable and scarce resource<br />

of water is a top priority on the<br />

international agenda. Today, one out<br />

of six people have no access to clean<br />

drinking water. The problem of droughts<br />

is becoming more acute in various regions<br />

of the world as a result of climate<br />

change. As a multinational, we take it<br />

as our responsibility to use water as efficiently<br />

– and protect water resources<br />

as effectively – as possible. It is also part<br />

of our sustainability strategy to create<br />

business opportunities by addressing<br />

this challenge actively.<br />

Wastewater management has always<br />

been a core activity of our environmental<br />

protection efforts. The company operates<br />

production sites all over the world. Two<br />

percent of our water is used in regions<br />

classified by the World Resources Institute<br />

as “water scarce areas.” Over the course<br />

of 2011, we decided to further strengthen<br />

our water commitment and bundled it<br />

in a document called the “Bayer Water<br />

Position.” We have defined three fields of<br />

activity. First, we follow clear targets for<br />

reducing pollutants and water consumption<br />

at relevant production sites. Second,<br />

we want to contribute to more efficient<br />

water use and improved water quality<br />

with the products and technologies that<br />

we develop and offer. And third, we also<br />

support community and research projects<br />

that promote the responsible use of water.<br />

Furthermore, we share our knowledge<br />

and endeavors with other stakeholders,<br />

for example in the CEO Water Mandate<br />

initiative of the UN <strong>Global</strong> <strong>Compact</strong> or<br />

the Water Disclosure Project.<br />

Solutions for agriculture<br />

The agricultural sector accounts for<br />

some 70 percent of global freshwater<br />

requirements. This in turn makes water<br />

a crucial factor for crop losses in regions<br />

where water is scarce. Our research and<br />

technologies – such as the breeding<br />

of stress-resistant plants – ensure increased<br />

planting efficiency and higher<br />

crop yields. This is extremely important<br />

if we take into account that there will<br />

not be any more arable land available,<br />

but that there will be a rising demand<br />

for food in the future. In various research<br />

partnerships – for example,<br />

with the Commonwealth Scientific and<br />

Industrial Research Organisation in<br />

Australia – we are working to develop<br />

major drought-tolerant crops with re-<br />

Water-efficient industrial production<br />

In our own production facilities, we work<br />

to continuously improve the efficiency<br />

of water use and reduce water pollution.<br />

For this, in all three Bayer subgroups –<br />

HealthCare, CropScience, and Material-<br />

Science – we have implemented specific<br />

systems, standards, and technologies.<br />

We have developed a number of energyefficient<br />

technologies to purify industrial<br />

wastewater. These processes are successfully<br />

used at various Bayer sites, as well as<br />

by an increasing number of our customers.<br />

For example, through the application of<br />

modern sedimentation tanks, we have<br />

recently reduced the share of nitrogen<br />

compounds in wastewater at our headquarters<br />

site in Leverkusen, Germany, by<br />

more than 40 percent. In Spain, water has<br />

been scarce during the summer months<br />

in recent years. At our site in Tarragona,<br />

we will reduce total water use by 7 percent<br />

in the future, as we now collect<br />

rainwater there for use as cooling water.<br />

At the site in Baytown, Texas, United<br />

States, phosphorous emissions in the<br />

form of phosphate have been eliminated<br />

altogether in the production of polycarbonate<br />

through process improvements.<br />

As a participant of the <strong>Global</strong> <strong>Compact</strong>,<br />

we act in accordance with the values<br />

and principles of this initiative with a<br />

series of measures, only some of which<br />

I have mentioned.<br />

Bayer promotes responsibility for water<br />

Bayer supports various research and community activities within the scope<br />

of its water commitment. In keeping with Principle 8 of the <strong>Global</strong> <strong>Compact</strong><br />

– “Undertake initiatives to promote greater environmental responsibility” – the<br />

company is engaged in building awareness about the issue of water and in<br />

developing expertise, for example through cooperation with academia and<br />

farmers and support for education.<br />

Three examples:<br />

1 | Under the leadership of the Chair for Sustainable Development at Tongji<br />

University in China – funded by the Bayer Science & Education Foundation<br />

– a method has been developed for determining the water footprint of the<br />

Shanghai industrial region.<br />

2 | Supported by Bayer CropScience, the agricultural cooperative initiative<br />

“Nossa Agua” (“Our Water”) in Londrina in Paraná State, Brazil, aims<br />

at restoring the ecosystem along the Ivai and Tibagi rivers through<br />

reforestation along the riverbanks with native trees.<br />

3 | Each year, the Bayer Science & Education Foundation and the Bayer USA<br />

Foundation, together with an NGO, organize the <strong>International</strong> Summer<br />

Sustainability Camp for school students with a focus on water conservation<br />

and further sustainability topics.<br />

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113


Best Practice<br />

Environment<br />

BSH Bosch und Siemens Hausgeräte<br />

Less is More<br />

Less is more – This applies especially where the environment is concerned. Less energy<br />

consumption means more climate protection, because using energy efficiently is the fastest<br />

and easiest way to save energy and avoid CO 2<br />

emissions. This applies to all areas of life –<br />

including the “little things”. With super-efficient home appliances, every household can<br />

reduce its power and water consumption considerably. And that benefits our climate and our<br />

budgets.<br />

By Fridolin Weindl<br />

Since the average household appliance<br />

in the kitchen, bathroom, and cellar has<br />

a useful life of 10 to 15 years, the savings<br />

potential worldwide is huge. Modern<br />

fridge-freezer combinations, for example,<br />

consume around 70 percent less<br />

electricity than comparable models did<br />

15 years ago. Modern washing machines<br />

and dishwashers also use only half as<br />

much electricity as models that are 15<br />

years old. The reasons for this progress<br />

are the huge technical improvements<br />

and innovative technologies in today’s<br />

appliances. Less energy consumption<br />

does not, however, mean that modern<br />

refrigerators, washing machines, and<br />

dishwashers offer less convenience, performance,<br />

or quality. On the contrary,<br />

today’s home appliances deliver outstanding<br />

convenience and top quality<br />

paired with maximum efficiency.<br />

And to make the purchasing decision<br />

easier for consumers, home appliances<br />

in Europe have been required to feature<br />

the European Union’s Energy Label for<br />

many years. This allows consumers to see<br />

at a glance whether a model is energyefficient<br />

or a power hog. Since December<br />

2010, the most efficient washing machines,<br />

dishwashers, and refrigeration<br />

appliances carry the A+++ energy rating.<br />

The number of plus symbols makes a<br />

significant difference, because a model<br />

in energy-efficiency class A+++ consumes<br />

60 percent less power than a model in<br />

class A and is still 50 percent more efficient<br />

than an appliance sporting the<br />

A+ rating. That means that a household<br />

that upgrades all its appliances to superefficient<br />

models can save up to €270<br />

in energy costs each year. Savings like<br />

these pay for the additional cost of highefficiency<br />

models within a few years. As<br />

a result, buying a new home appliance<br />

will have a major impact on the size of<br />

your electricity bill for years to come.<br />

Government agencies have also recognized<br />

the importance of energy efficiency:<br />

As of mid-<strong>2012</strong>, new models of<br />

energy-efficiency class A will be barred<br />

from the market. Nevertheless, over 190<br />

million appliances that are 10 years old<br />

or older are still in use in European<br />

households, consuming a lot more energy<br />

than necessary. If these appliances<br />

were to be replaced with modern models,<br />

up to 44 billion kWh of electricity could<br />

be saved each year – about as much as<br />

the entire country of Portugal consumes<br />

annually.<br />

BSH Bosch und Siemens Hausgeräte<br />

GmbH, Europe’s leading manufacturer<br />

of home appliances, has firmly established<br />

the topic of energy efficiency in<br />

its product policy and business strategy<br />

for many years. BSH engineers strive<br />

every day to continuously improve the<br />

convenience and performance of the<br />

appliances while steadily reducing their<br />

energy and water consumption. To make<br />

this progress visible and measurable,<br />

BSH was the first home appliance manufacturer<br />

to combine its most efficient<br />

models in a so-called Super Efficiency<br />

Portfolio and have the numbers checked<br />

by professional auditors. Each year, only<br />

the most efficient models on the market<br />

are added to this portfolio. In 2011,<br />

more than one in four appliances sold<br />

by BSH in Europe already belonged to<br />

this elite group. Extrapolated to the<br />

average lifespan of these appliances,<br />

this represents savings of around 1.9<br />

billion kWh, the equivalent of the annual<br />

power consumption of over 500,000<br />

private households in Germany. And<br />

since super-efficient home appliances<br />

with minimum consumption values<br />

are no longer a niche market, they are<br />

major contributors to climate protection.<br />

A look at the product lifecycle confirms<br />

this: Depending on the product category,<br />

the usage phase of the appliances currently<br />

in our households accounts for<br />

80 to 95 percent of their environmental<br />

impact. That is why it is so important<br />

to replace outdated models with new,<br />

energy-efficient models as quickly as possible,<br />

because dealing with our resources<br />

in a responsible manner is everyone’s<br />

task. “I cannot understand why energy<br />

efficiency doesn’t play a greater role in<br />

public policies,” says Dr. Kurt-Ludwig<br />

Gutberlet, CEO of BSH. He therefore<br />

appeals to government and politicians<br />

to address consumers more strongly<br />

with regard to energy efficiency. “In<br />

terms of energy and climate policies,<br />

it would be desirable if government<br />

were to promote the sale of particularly<br />

energy-efficient appliances with special<br />

incentive programs,” adds Gutberlet,<br />

“because the best energy is the energy<br />

that isn’t being consumed!”<br />

Super Efficiency<br />

Super-efficient household appliances make a significant contribution toward<br />

reducing the consumption of energy and resources in private households. Consuming<br />

up to 73 percent less electricity than comparable appliances from 15<br />

years ago, modern household appliances offer an enormous potential in reducing<br />

energy consumption and CO 2<br />

emissions. As the first manufacturer of household<br />

appliances, BSH Bosch und Siemens Hausgeräte GmbH combined its most economical<br />

appliances in a Super Efficiency Portfolio and has continued to expand<br />

this over the past two years. The super-efficient appliances alone, which were<br />

sold by BSH in 2010 throughout Europe, led to electricity savings of 1.9 billion<br />

kWh. “With our super-efficient household appliances, we make a measurable<br />

contribution to climate protection,” says BSH CEO Dr. Kurt-Ludwig Gutberlet.<br />

“Energy-efficient household appliances have an enormous potential for climate<br />

protection, without requiring consumers to forego comfort at the same time.”<br />

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115


Best Practice<br />

Environment<br />

Consolidated Contractors Company<br />

Habshan 5 –<br />

Going Green<br />

By Tony Awad<br />

Over the years, the Consolidated Contractors Company (CCC)<br />

has participated in and contributed to the countries and communities<br />

in which it has operated. Contributions have come in<br />

the form of monetary and in-kind donations. The “Habshan 5”<br />

project is an example of CCC’s sustainable engagement.<br />

Integrated Gas Development, also known<br />

as Habshan 5, is a project run by Abu<br />

Dhabi Gas Industries to improve the<br />

production of natural gas liquids in<br />

the region and is aimed at significantly<br />

boosting the Emirate’s offshore gas production.<br />

The reason for doing so is the permanent<br />

demand for energy all over the<br />

world. According to the UN, the world<br />

population is rapidly expanding. The<br />

world population had reached 1 billion<br />

people by 1800; 2 billion by 1922; and<br />

over 6 billion by 2000. It is estimated<br />

that the population will swell to more<br />

than 9 billion by 2050. That means that<br />

if the world’s natural resources were<br />

evenly distributed, in 2050 people will<br />

only have 25 percent of the resources<br />

per capita that people had back in 1950.<br />

The world has a fixed amount of natural<br />

resources – some of which are already<br />

depleted. As population growth strains<br />

our finite resources, fewer resources<br />

are available. As a consequence, there<br />

is a need for a more sophisticated use<br />

of the resources at hand as well as a<br />

need for more responsible methods of<br />

extraction.<br />

One of the partners of the Habshan 5<br />

project is the Consolidated Contractors<br />

Company, which is aware of its social<br />

and environmental responsibilities.<br />

In six decades of operation, CCC has<br />

grown to become one of the leading<br />

contractors in the international construction<br />

field, with more than 110,000<br />

employees comprised from more than<br />

80 nationalities.<br />

CCC is committed to providing reliable,<br />

amicable, and professional service to its<br />

clients; being supportive of local business<br />

and communities; and being protective<br />

of the environments within which it<br />

operates.<br />

CCC’s commitment to growth is firmly<br />

linked to the continuous development<br />

of its employees and its ability to provide<br />

them with rewarding careers. The<br />

company is devoted to its employees’<br />

safety and health, job security, and welfare.<br />

Its strength emanates from its<br />

distinct culture; the strong and close<br />

relationships with its clients; its employees’<br />

competence and loyalty; its<br />

entrepreneurial and flexible management;<br />

and its focus on quality, safety,<br />

and commercial acumen.<br />

CCC has been a participant of the United<br />

Nations <strong>Global</strong> <strong>Compact</strong> since 2001. Corporate<br />

social responsibility is always a<br />

project in progress, like the rest of CCC’s<br />

business. Every CCC activity and practice<br />

is meant to make a lasting impact, economically,<br />

socially, and environmentally.<br />

CCC’s Habshan 5 team started their green<br />

campaign to preserve the standard of<br />

living for future generations. They began<br />

to develop a green strategy to, among<br />

other things:<br />

1. Save energy:<br />

In Habshan, electricity is provided from<br />

diesel generators. Efforts made to manage<br />

consumption include:<br />

• Energy-saving lamps used throughout<br />

the camp and offices<br />

• Solar power supply for all security lights<br />

• High masts for camp lighting<br />

• Timers for users’ consumption<br />

• Fully synchronized powerhouse to ensure<br />

optimal operation<br />

• Newly installed units and offices with<br />

high density insulation, improving<br />

cooling by 43 percent<br />

2. Save water:<br />

In Habshan, water is being trucked from<br />

filling stations connected to desalination<br />

plants. Efforts made to optimize the<br />

consumption include:<br />

• Spring taps<br />

• Gravity water supply (10 m elevated<br />

tanks) to control the pressure and reduce<br />

consumption<br />

• Treated water for flushing and irrigation<br />

network (50 % reduction in supply)<br />

• Meters used throughout the camp to<br />

identify leaks and misuse<br />

• Flow regulators added on all showers<br />

3. Less Fuel / Gas = Saving<br />

(and better health!):<br />

Personal car travel produces CO 2<br />

gas<br />

emissions and it contributes to local air<br />

pollution and congestion. On average, for<br />

each liter of fuel burnt in a car, more<br />

than 2.5 kg of CO 2<br />

is released. Efforts<br />

made to manage consumption include:<br />

• Diesel cars (all 4 x 4)<br />

• Low-consumption engines<br />

• Proper planning for extended-hours<br />

requirements and night loads<br />

• 1,000 trees planted in Habshan – this<br />

will remove up to 50 tons of CO 2<br />

CCC proved to lead by example in promoting<br />

the green campaign in Habshan.<br />

A brief presentation titled “Habshan 5:<br />

The GREEN Journey” was introduced<br />

to the project sponsors on February 23,<br />

2011. The CCC Habshan 5 project team is<br />

fully committed to making a difference.<br />

It is important that we leave a legacy of<br />

a clean, green, and sustainable environment<br />

to coming generations. After all,<br />

our future lies in our own hands, and<br />

going green is the right solution for<br />

everyone on the planet.<br />

CORPORATE PROFILE<br />

Consolidated Contractors Company<br />

(CCC) is a contracting company<br />

formed in 1952 and incorporated<br />

in Lebanon. The managing office<br />

is presently located in Athens,<br />

Greece. CCC is by far the largest<br />

engineering, procurement, and<br />

construction company in the Middle<br />

East and is ranked #18 by ENR<br />

magazine among all international<br />

construction companies. CCC<br />

currently operates in 40 countries<br />

on 5 continents. It employs more<br />

than 110,000 employees comprising<br />

more than 80 nationalities<br />

and is responsible for building<br />

some of the most challenging and<br />

complex facilities in the world.<br />

Drawing on its long and successful<br />

experience, CCC can provide<br />

a full range of project services<br />

– project development; detailed<br />

engineering, procurement, and<br />

construction; start-up operation;<br />

and maintenance – as pertains to<br />

the following:<br />

• Buildings and civil engineering<br />

works<br />

• Oil and gas, and water pipelines<br />

• Oil and gas, and petrochemical<br />

plants and refineries<br />

• Power plants<br />

• Marine works<br />

• Offshore installations<br />

• Maintenance of mechanical<br />

installations and underwater<br />

structures<br />

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117


Best Practice<br />

Environment<br />

Deutsche Telekom<br />

The German Experiment<br />

The German government has decided to phase out nuclear power without making any<br />

changes to its climate protection targets. This means that all of us will have to strengthen<br />

our efforts to achieve more energy efficiency by searching for additional potential that will<br />

enable us to reach the climate protection targets without relying on nuclear energy. There is<br />

no doubt about it: CO 2<br />

emissions will continue to rise globally. This fact makes us aware of<br />

the enormous responsibility that we have for the sake of the environment.<br />

In 1995 Deutsche Telekom was the<br />

first DAX 30 enterprise to commit itself<br />

to climate protection by incorporating<br />

mandatory CO 2<br />

reduction targets<br />

for Germany into its company targets.<br />

We are fully aware of our corporate<br />

responsibility and have defined our<br />

own ambitious climate protection goals.<br />

For example, our climate protection<br />

strategy defined in 2005 stipulated<br />

that we must reduce our overall CO 2<br />

emissions by 20 percent in the period<br />

from 1995 to 2020. We have already<br />

met this goal and have therefore revised<br />

our targets – to reduce CO 2<br />

emissions<br />

Luis Neves, Group Climate Change and<br />

Sustainability Officer, has taken over<br />

from Dr. Ignacio Campino this position<br />

as of February 1, <strong>2012</strong>.<br />

by 40 percent by 2020. Neither the<br />

German government nor the European<br />

Union have such ambitious targets.<br />

And thanks to specific steps, we are<br />

on the right track toward reaching this<br />

milestone.<br />

One of the steps Deutsche Telekom has<br />

taken is its Green Car Policy for ensuring<br />

sustainable mobility throughout<br />

the Group. By 2015 the CO 2<br />

emissions<br />

produced by new vehicles in the Group<br />

fleet in Germany should be as little as<br />

110 grams per kilometer. In comparison,<br />

the European Union is demanding a<br />

reduction in emissions to 120 grams<br />

by 2015.<br />

In the medium term, we plan to convert<br />

the remaining analog parts of the<br />

telephone network to IP technology for<br />

better energy efficiency and to make<br />

the entire German telephone network<br />

ready for the future.<br />

<strong>International</strong>izing climate<br />

protection<br />

Furthermore, we are currently working<br />

on internationalizing our climate<br />

protection strategy. Based on Groupwide<br />

targets, combined with identified<br />

potentials at the regional level, we plan<br />

to define individual reduction goals for<br />

our international subsidiaries.<br />

Moreover, when making investments<br />

we look for options that are favorable<br />

to our climate protection criteria. In<br />

the future we also want to focus on<br />

CO 2<br />

emissions throughout the entire<br />

value chain of our products – from<br />

the extraction of natural resources to<br />

production processes and even the sale<br />

of our products and services to our<br />

end-customers.<br />

Since 2009, both our new climate protection<br />

strategy and the internationalization<br />

of this approach have been led<br />

and monitored by the Climate Change<br />

Group, an in-house committee of experts.<br />

This project is being driven by<br />

Luis Neves, Group Climate Change and<br />

Sustainability Officer, in collaboration<br />

with the company’s Sustainability unit.<br />

“Climate protection is one of the greatest<br />

challenges currently facing us all. As an<br />

ICT company, we have an opportunity<br />

to offer solutions for reducing CO 2<br />

emissions.<br />

These can help shape a more sustainable<br />

future for millions of people,”<br />

says Luis Neves, explaining his motivation<br />

for promoting climate protection<br />

even beyond company boundaries.<br />

The great potential<br />

A 2009 study sponsored by Deutsche<br />

Telekom, the German Federal Ministry<br />

of Economics and Technology,<br />

the <strong>Global</strong> e-Sustainability Initiative,<br />

the Potsdam Institute, SAP, Huawei,<br />

Siemens and the Boston Consulting<br />

Group to analyze potential savings<br />

in the field of information and communications<br />

technology (ICT), entitled<br />

“SMART 2020,” summarized the opportunities<br />

available to our industry as<br />

follows: In Germany alone, telecommunications<br />

companies could save some<br />

13 metric megatons of CO 2<br />

emissions<br />

by the year 2020, solely as a result of<br />

direct savings from its own business<br />

activities. These include savings from<br />

energy-efficient data centers, virtualization<br />

or cloud computing, and energyefficient<br />

terminal equipment.<br />

If implemented sustainably and consistently,<br />

as an “enabler” the ICT industry<br />

could even achieve a potential reduction<br />

of up to 194 metric megatons of<br />

CO 2<br />

emissions over the next eight years.<br />

This is equivalent to cutting Germany’s<br />

total emissions by up to 25 percent.<br />

Worldwide, the figure is 7.8 gigatons of<br />

CO 2<br />

equivalent by 2020, equivalent to<br />

15 percent of total emissions under the<br />

“business as usual” scenario. The identified<br />

indirect reduction potential is a<br />

theoretical maximum, and the business<br />

value of this potential is estimated at up<br />

to €84 billion by 2020 for Germany alone.<br />

As one of the world’s largest telecommunications<br />

providers, we recognize that<br />

we have an obligation and the potential<br />

to offer climate-friendly products and<br />

services to our customers, and to give<br />