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Global Compact International Yearbook 2016

The Sustainable Development Goals are an ambitious agenda with 17 topics addressing the global challenges of our time. A key topic is innovation: Business must fit into planetary boundaries. This probably will not work with traditional business models. That is why we need new, fresh ideas. We need change, even when it happens in a rough, disruptive way. And the earlier the better. This is why the upcoming edition of the Global Compact International Yearbook, published in September 2016, has chosen sustainable innovation as the key topic. Also includes exclusive interviews with Angelina Jolie, Robert Redford and Sigourney Weaver. The Global Compact International Yearbook is with more than 500,000 readers one of the worlds leading CSR publications. Münster/New York 2016: 164 pages, paperback Publishing houses: macondo publishing/UN Publications Subscription (via UN Publications only): 30.00 USD (regular) 15.00 USD (reduced) ISBN13: 978-3-946284-01-7 / ISSN-Print: 2365-3396 / ISSN-Internet: 2365-340x

The Sustainable Development Goals are an ambitious agenda with 17 topics addressing the global challenges of our time. A key topic is innovation: Business must fit into planetary boundaries. This probably will not work with traditional business models. That is why we need new, fresh ideas. We need change, even when it happens in a rough, disruptive way. And the earlier the better. This is why the upcoming edition of the Global Compact International Yearbook, published in September 2016, has chosen sustainable innovation as the key topic.

Also includes exclusive interviews with Angelina Jolie, Robert Redford and Sigourney Weaver.

The Global Compact International Yearbook is with more than 500,000 readers one of the worlds leading CSR publications.

Münster/New York 2016: 164 pages, paperback
Publishing houses: macondo publishing/UN Publications
Subscription (via UN Publications only): 30.00 USD (regular) 15.00 USD (reduced)
ISBN13: 978-3-946284-01-7 / ISSN-Print: 2365-3396 / ISSN-Internet: 2365-340x

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we support<br />

<strong>Global</strong> <strong>Compact</strong><br />

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

<strong>2016</strong>


This publication is kindly supported by:<br />

Acciona<br />

Adecco<br />

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

Armacell<br />

Audi<br />

Banca Popolare di Sondrio<br />

BASF<br />

Bayer<br />

Bosch<br />

Commerzbank<br />

Consolidated Contractors Company<br />

Deutsche Telekom<br />

EDF Group<br />

Green Delta Insurance<br />

HOCHTIEF<br />

Manila Doctors Hospital<br />

mcs<br />

Merck<br />

MTU Aero Engines<br />

Nestlé<br />

Philip Morris <strong>International</strong><br />

PostNL<br />

ROMRADIATOARE<br />

Sakhalin Energy<br />

SkyPower<br />

Vaisala<br />

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

Deutsche Post DHL Group<br />

The <strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> is a product of macondo publishing GmbH in support of the UN <strong>Global</strong> <strong>Compact</strong>, the Sustainable<br />

Development Goals, and the advancement of corporate sustainability globally. Use of company names and examples does not constitute endorsement<br />

by the UN <strong>Global</strong> <strong>Compact</strong>. While the yearbook is developed in cooperation with the <strong>Global</strong> <strong>Compact</strong> Office, sponsorship by companies does<br />

not constitute a contribution to the Foundation for the <strong>Global</strong> <strong>Compact</strong>. Financial contributions are not collected on behalf of the <strong>Global</strong> <strong>Compact</strong><br />

Office. Rather, they are exclusively used to fund the development of the <strong>International</strong> <strong>Yearbook</strong> by macondo publishing GmbH.


we support<br />

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

“<br />

Last year’s adoption of the 2030 Sustainable<br />

Development Agenda, together with the historic<br />

Paris Climate Agreement on climate change, sent a<br />

powerful message far and wide: we cannot continue<br />

on our current course.<br />

We need new ways of living that will end the suffering,<br />

discrimination and lack of opportunity that define the<br />

lives of billions of people around the world, and that<br />

drive instability and conflict.<br />

The solutions must involve everyone, from world leaders<br />

and chief executives, to educators and philanthropists.<br />

We must work together – across sectors and industries –<br />

in broader and deeper partnerships.<br />

Two steps are essential.<br />

First, we need to mobilize the global business community<br />

as never before. I have seen first-hand the power of the<br />

UN <strong>Global</strong> <strong>Compact</strong>’s Ten Principles on human rights,<br />

labour, environment and anti-corruption. They are helping<br />

thousands of companies contribute to sustainability.<br />

Second, innovation will be crucial. I urge you to take<br />

advantage of the new markets and solutions that are<br />

emerging; to set corporate goals inspired by the SDGs;<br />

”<br />

and to let sustainability drive innovation<br />

and investment.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 3


Note<br />

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

United Nations<br />

Secretary-General<br />

6 Sustainable<br />

Innovation<br />

8 Disruption<br />

9 How to Be an Intrapreneur<br />

Perry Yeatman<br />

10 Corporate Social Innovation<br />

is the New Corporate Social<br />

Responsibility<br />

Elizabeth Boggs Davidsen<br />

12 Too Big to Fail? Disruptive<br />

Innovation<br />

Dr. Elmer Lenzen<br />

15 Capitalism Is Chaos<br />

16 Sustainability-Oriented<br />

Innovation: A Bridge to<br />

Breakthroughs<br />

Prof. Jason Jay, Sergio Gonzalez,<br />

and Marine Gerard<br />

22 Does Firm Innovation<br />

Affect CSR? What the<br />

Academics Say<br />

24 DECArBoNiZATioN<br />

25 Growth: A Hard Habit to Break<br />

Prof. Dr. Felix Ekardt<br />

28 The De-Carb Diet<br />

Dr. Elmer Lenzen<br />

32 TALENTs<br />

33 Is the Meaning of Work about<br />

to Change?<br />

Rick Goings<br />

36 How Does Industry 4.0 Affect<br />

Growth and Employment?<br />

Prof. Dr. Harald Hagemann<br />

32 FUTUrE MArKETs<br />

39 How to Bust the Biggest Myths<br />

about the Circular Economy<br />

Liz Goodwin<br />

42 Sharing Has Been Hijacked<br />

Lily Cole and Adam Werbach<br />

44 Start-Ups: About Do-Gooders,<br />

Money-Burners, and<br />

Social Entrepreneurs<br />

46 Changemaker<br />

48 The Peaceful Punk:<br />

Angelina Jolie<br />

52 The Problem Solver:<br />

Alejandro Aravena<br />

54 Doing More with Less:<br />

Navi Radjou<br />

56 The Savior of Sundance:<br />

Robert Redford<br />

60 Real-life Eco-warrior:<br />

Sigourney Weaver<br />

64 The Drowning Child Dilemma:<br />

Peter Singer<br />

66 The Water Advocate:<br />

Mina Guli<br />

72 The Taste Tester:<br />

Kevin McCloud<br />

140 Cities of the Future<br />

6<br />

Sustainable Innovation<br />

4<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong>


GooD praCtICe<br />

SUSTAINABLE<br />

DEVELOPMENT<br />

G O A L S<br />

46<br />

Changemaker<br />

72<br />

74<br />

76<br />

78<br />

82<br />

84<br />

86<br />

88<br />

90<br />

94<br />

96<br />

adecco<br />

Banca popolare di Sondrio<br />

Bosch<br />

Deutsche post DHl Group<br />

Deutsche telekom<br />

Green Delta Insurance<br />

Manila Doctors Hospital<br />

Merck<br />

philip Morris <strong>International</strong><br />

Sakhalin energy<br />

Sanofi<br />

140<br />

Cities of the Future<br />

102<br />

104<br />

106<br />

108<br />

110<br />

112<br />

114<br />

116<br />

118<br />

120<br />

122<br />

126<br />

128<br />

130<br />

132<br />

134<br />

136<br />

138<br />

acciona<br />

arab african <strong>International</strong> Bank<br />

armacell<br />

audi<br />

BaSF<br />

Bayer<br />

Commerzbank<br />

Consolidated Contractors Company<br />

eDF Group<br />

HoCHtIeF<br />

MaN<br />

mcs<br />

MtU aero engines<br />

Nestlé<br />

postNl<br />

roMraDIatoare<br />

Skypower<br />

vaisala<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 5


6<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong>


Sustainable<br />

innoVAtion<br />

the idea of sustainability is based on the certitude that we have<br />

planetary boundaries. the WWF vividly illustrates this with “earth<br />

overshoot Day.” It describes the day of the year on which human<br />

demands on natural resources exceed the capacity of the earth<br />

to reproduce these resources. presently, earth overshoot Day is<br />

at the beginning of august. From then onward, we are looting our<br />

resources.<br />

What does this mean for corporate sustainability? Business must<br />

fit into planetary boundaries. this probably will not work with<br />

traditional business models. that is why we need new, fresh ideas.<br />

We need change, even when it happens in a rough, disruptive way.<br />

and the earlier the better. When you talk about the Sustainable<br />

Development Goals, you have to talk about sustainable innovation.<br />

the SDGs are the agenda, innovation is the pathway.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 7


Disruption<br />

“<br />

Action without vision<br />

is only passing time,<br />

vision without action<br />

is merely day dreaming,<br />

but vision with action<br />

”<br />

can change the world.<br />

Nelson Mandela, political leader (1918 – 2013)<br />

8<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong>


innoVAtion<br />

how to Be An<br />

Intrapreneur<br />

By Perry Yeatman<br />

every great innovation begins with an idea.<br />

every great achievement requires a champion.<br />

Scientists. explorers. adventurers.<br />

entrepreneurs.<br />

For centuries, intrepid individuals have been tackling<br />

problems and seizing opportunities others either could<br />

not or would not. By doing so they have changed the way<br />

we live and work, time and again. Consider all of the change<br />

that maverick individuals have largely brought about in the<br />

past 15 years alone: mapping the human genome, the rise of<br />

human-machine learning, the commonplace harnessing of<br />

big data across all sectors, the creation of the smart phone,<br />

the rise of social media, the internet of things, and apps that<br />

let us do virtually everything from the palm of our hands<br />

– from banking to shopping to learning. These developments<br />

have transformed our world, and largely for the better.<br />

New ways to tackle society’s challenges<br />

But it has not been enough. We are still facing serious issues<br />

related to our increasingly resource-constrained planet and<br />

the inability of many of the world’s governments to meet<br />

the basic needs of their citizens: nutritious food, safe shelter,<br />

quality education, affordable healthcare, and more. So we<br />

need more innovative thinking. And we need it at scale. And<br />

we need it fast. Enter the era of corporate social innovation,<br />

where companies seek to build their businesses while tackling<br />

important societal problems at the same time. To learn more<br />

about this growing trend and how to make it happen within<br />

your company, check out the new report recently released by<br />

the World Economic Forum.<br />

As the report outlines, we largely know what needs to be done,<br />

and more leading companies are stepping up to the plate. The<br />

remaining question is who within these companies will lead<br />

the charge? Who will become these much needed “corporate<br />

entrepreneurs”? Who will pioneer this new breed of professional,<br />

most often referred to as an “intrapreneur”?<br />

What is an intrapreneur?<br />

Think of them as old-fashioned “change agents,” but change<br />

agents with a specific focus: to make or save the company’s<br />

money while tackling a pressing societal issue.<br />

Who can become a successful intrapreneur? Well, that is the<br />

good news: They can come from practically anywhere in the<br />

organization: marketing, supply chain, operations, finance,<br />

and more. And they do not have to be at the very top (C-suite)<br />

to be effective. In my experience, some of the most effective<br />

intrapreneurs come from upper / middle management.<br />

As for the personality traits of these internal champions, they<br />

are much the same as for a successful entrepreneur: curious,<br />

insightful, doggedly determined, strategically agile, etc. But<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 9


there is one critical difference: Whereas a successful entrepreneur<br />

can be bombastic, unrelenting, and uncompromising,<br />

an intrapreneur needs to be viewed as a team player<br />

– someone not out for themselves but out for the company.<br />

Why? Because any big new idea hatched within a major<br />

corporation will ultimately require new resources and the<br />

cooperation of literally hundreds of people, most of whom<br />

will not report directly to the intrapreneur – not at first<br />

anyway. So, to be successful, an intrapreneur needs to be a<br />

keen observer of human nature and organizational dynamics<br />

as well as a master in the art of persuasion. But with these<br />

skills, intrapreneurs can be real game-changers, so perhaps<br />

it is not surprising that they are also being increasingly<br />

sought after by the world’s leading companies.<br />

This trend could not come at a better time because not<br />

only does the world need novel approaches and solutions<br />

to pressing social issues, but companies themselves need to<br />

figure out how to keep their talent engaged and motivated.<br />

Today, in countries such as the United States, millennials<br />

are the largest segment of the workforce and – according<br />

to a recent Deloitte survey – fewer and fewer are loyal to<br />

their current employers.<br />

CSI is the new CSR<br />

A new trend in international development<br />

has paired some unlikely business partners:<br />

Development finance institutions and impact<br />

investors are working with large multinational<br />

corporations to fund projects that advance both<br />

development and business agendas.<br />

By Elizabeth Boggs Davidsen<br />

In fact, this study finds that nearly 50 percent of those<br />

surveyed would, given the chance, leave their current employer<br />

within the next two years. This remarkable lack of<br />

allegiance represents a serious challenge to all businesses.<br />

However, it is not too late for employers to turn this around.<br />

The Deloitte survey also found that creating opportunities<br />

for millennials to pursue purpose and profit simultaneously<br />

within their existing organizations is one of the best ways<br />

to bridge this loyalty gap.<br />

So despite the fact that companies are facing significant<br />

headwinds, there may be an elegant solution: Companies<br />

need stable, prosperous environments in which to operate<br />

and grow their businesses; growth requires attracting and<br />

retaining the best talent – including millennial talent.<br />

Pursuing corporate social innovation opportunities and<br />

turning to corporate intrapreneurs to lead these efforts<br />

could help to both build the business and fill the talent<br />

pipeline. Could there be a more win / win / win solution?<br />

Perry Yeatman is a Principal & CMO at Mission Measurement,<br />

author of the award-winning book Get Ahead by Going<br />

Abroad and CEO of Perry Yeatman <strong>Global</strong> Partners.<br />

This article was originally published by the World Economic<br />

Forum’s Agenda.<br />

10<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong>


innoVAtion<br />

T<br />

his “corporate social innovation”<br />

is the latest advance along the<br />

continuum of corporate social<br />

responsibility, which began in the 1990s,<br />

when many companies began embracing<br />

worthy community causes in areas<br />

where they operated. Programs focused<br />

mainly on the company’s reputation<br />

and license to operate, with little direct<br />

connection to their bottom lines. For<br />

example, Microsoft initiated an annual<br />

Employee Giving Campaign, in which<br />

employees attend fundraising events for<br />

nonprofit organizations.<br />

Good corporate citizenship<br />

This evolution continued in the 2000s,<br />

when companies began integrating good<br />

corporate citizenship into their business<br />

models, often through partnerships with<br />

development finance institutions. For<br />

instance, when the <strong>International</strong> Youth<br />

Foundation and the Multilateral Investment<br />

Fund (MIF) of the Inter-American<br />

Development Bank Group launched the<br />

New Employment Opportunities Program<br />

(NEO) for youth in 2012, five large<br />

companies pledged resources and joined<br />

the alliance: Arcos Dorados, Caterpillar,<br />

CEMEX, Microsoft, and Walmart. NEO<br />

offers job training and placement services<br />

to improve the employability of<br />

poor youth, and thereby the quality of<br />

the workforce throughout Latin America<br />

and the Caribbean. The member companies<br />

– some of the largest employers in<br />

the region – are contributing money<br />

and helping to shape the training curriculum<br />

and other employment services.<br />

The partnership is paying off; NEO is on<br />

track to reach 1 million youth through<br />

effective job-training programs by 2020.<br />

Shared value<br />

In 2011, professors from Harvard Business<br />

School published an article on<br />

“Creating Shared Value,” and since then,<br />

there has been a growing global movement<br />

to make societal impacts integral<br />

to a company’s strategy. SABMiller, the<br />

world’s second-largest brewer, was an<br />

early adopter. SABMiller and the MIF’s<br />

4e Camino al Progreso Program targets<br />

more than 380,000 small retailers in SAB-<br />

Miller’s biggest Latin American markets:<br />

Colombia, Peru, Ecuador, Panama, Honduras,<br />

and El Salvador. The 4e program,<br />

which began in 2013, aims to improve<br />

small retailers’ business performance<br />

– and therefore quality of life and leadership<br />

abilities – through a combination<br />

of classroom training and in-store<br />

mentoring on business, life skills, and<br />

leadership, and by strengthening the<br />

broader “business ecosystems” in which<br />

the retailers operate, with a special focus<br />

on improving their access to financing<br />

and technology. The hope is that this<br />

effort will strengthen SABMiller’s retail<br />

network and sales.<br />

Corporate social innovation<br />

The latest evolution on this continuum<br />

has been the advent of corporate social<br />

innovation (CSI). The World Economic Forum<br />

launched the <strong>Global</strong> Agenda Council<br />

on Social Innovation in 2014 – bringing<br />

together an unlikely cross-section<br />

of corporate leaders, impact investors,<br />

and development executives – and offered<br />

a definition for CSI that builds on<br />

shared-value concepts: when companies<br />

proactively design and implement business<br />

models that increase incomes and<br />

better the quality of life of underserved<br />

or vulnerable communities at the bottom<br />

of the market’s pyramid. The mutual<br />

attraction for the unlikely bedfellows is<br />

that CSI initiatives are often fueled by<br />

corporate venture capital – the investment<br />

of cash reserves from a company<br />

to fund new endeavors.<br />

A new alignment is emerging among<br />

corporate venture capitalists and impact<br />

investors. The corporate venture capitalist<br />

is seeking returns for the company and<br />

new capabilities or access to markets that<br />

are aligned with its long-term business<br />

strategy. The impact investor is interested<br />

in placing capital into companies<br />

and generating measurable social and<br />

environmental impacts, together with a<br />

financial return. The impact investor also<br />

wants to expand effective development<br />

solutions and – together with development<br />

finance institutions – is beginning<br />

to understand that working with<br />

large companies may be the best route.<br />

Companies that set up corporate venture<br />

funds also have in-house expertise and<br />

distribution channels that allow them<br />

to scale-up successful projects.<br />

In its study, Investing in Breakthrough:<br />

Corporate Venture Capital, the think tank<br />

and advisory firm Volans identifies six<br />

sectors in which corporate venturing<br />

is active, because these sectors directly<br />

affect businesses, individuals, and the environment:<br />

cleantech, education, health,<br />

urban infrastructure and transportation,<br />

financial inclusion, and agriculture and<br />

food. Not surprisingly, these are also<br />

areas where impact investors place most<br />

of their investments.<br />

Some intriguing CSI examples are emerging.<br />

To name one: Shell Foundation, the<br />

philanthropic arm of the oil giant, formed<br />

a strategic partnership with Husk Power<br />

Systems, a biomass electricity generator.<br />

In five years, Husk has installed 84<br />

minipower plants, providing electricity<br />

to more than 200,000 people in 300<br />

rural villages in India. By electrifying<br />

villages, Husk is promoting economic<br />

development, as businesses are able to<br />

stay open after dark and children can<br />

study at night. Impact investors Acumen<br />

and Oasis Fund have contributed funding<br />

to the venture. Business leaders are at<br />

the forefront of transforming societies’<br />

ability to confront important challenges.<br />

Development finance institutions and<br />

impact investors are along for the ride,<br />

and it is guaranteed to be exciting.<br />

Elizabeth Boggs Davidsen is a principal<br />

specialist at the Multilateral Investment<br />

Fund (MIF) and responsible for its<br />

regional economic development and<br />

value-chains portfolios. She also advises<br />

on new partnership opportunities for the<br />

MIF’s grant and investment activities.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 11


Big<br />

Too Big to Fail ?<br />

Disruptive Innovation<br />

Every CEO generation has its own management buzz words. In the 1990s “re-engineering”<br />

was in fashion, then came “offshoring”, and today it is probably “disruptive innovation.”<br />

The concept was coined by Clayton M. Christensen, a Harvard Business School professor who<br />

introduced the wording in his 1995 article “Disruptive Technologies: Catching the Wave.”<br />

Two years later in his book The Innovator’s Dilemma, Christensen replaced the term disruptive<br />

technology with disruptive innovation. That was groundbreaking because he recognized that<br />

few technologies are intrinsically disruptive; rather, it is the business model behind it that<br />

disrupts and reinvents markets.<br />

By Dr. Elmer Lenzen<br />

But what is disruptive innovation?<br />

A disruptive innovation is one that creates a new market and/<br />

or consumer behavior. Often, this includes disrupting existing<br />

markets and displacing established market participants.<br />

This stands in contrast with sustaining innovation and the<br />

well-known continuous improvement model, which has a<br />

focus on the improvement of existing products. That is an<br />

interesting point because it means that even a company with<br />

a well-managed improvement and customer service ethos can<br />

be severely hurt by disruptive innovation. This happens when<br />

the companies stay “close to the customer” or “listen to the<br />

customer,” which is good, but at the same time they overhear<br />

the silent and marginal voices of future customers.<br />

But not all innovations are disruptive, even if they are revolutionary.<br />

The automobile, for example, was not a disruptive<br />

innovation for quite a while because early automobiles<br />

were expensive luxury products that did not challenge the<br />

transportation market of horse-drawn carriages. It was Henry<br />

Ford’s Model T in 1908 that made automobility a disruptive<br />

innovation because Ford’s vision completely changed our<br />

mobility behavior.<br />

How low-end disruption occurs<br />

Christensen distinguishes between “low-end disruption,”<br />

which targets customers with low budgets, and “new-market<br />

disruption,” which targets new customer requests. Low-end<br />

disruption occurs when the performance of a product exceeds<br />

the needs of a certain customer segment. Then innovations<br />

enter the market with lower performance levels but also with<br />

lower prices, and this combination is fine for a certain clientele.<br />

That is how new market players gain a foothold in the market.<br />

It becomes disruptive when the new player changes the whole<br />

market in the aftermath. But again, the starting point of low-<br />

12<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong>


innoVAtion<br />

IT sector as a place of permanent<br />

disruption<br />

Very practical examples of both low-end<br />

as well as new-market disruptions can be<br />

seen in the IT sector. At the beginning, IT<br />

incumbents completely misinterpreted<br />

the market. “There is no reason anyone<br />

would want a computer in their home,”<br />

said Ken Olsen, founder of Digital Equipment<br />

Corporation, in 1977. Digital Equipment<br />

in those days was a major force in<br />

the computer world – four years later,<br />

the first IBM PC proved Olsen wrong.<br />

Microsoft and Dell computers are two<br />

disruptive innovators that changed the<br />

markets with their low-end innovations.<br />

Later, it was Microsoft that missed the innovation<br />

of the internet browser and the<br />

need for internet guidance, giving space<br />

to new players such as Yahoo and, most of<br />

all, Google. New market disruption also<br />

came with the rise of social media sites<br />

Facebook and Twitter. The “internet of<br />

things” surely will be the next step, a combination<br />

of low-end as well as new-market<br />

disruptions. Google promises to reinvent<br />

cars as autonomous vehicles (new market);<br />

Amazon promises to reinvent shopping<br />

(again) using drones (low-market); 3-D<br />

printing could disrupt manufacturing<br />

(sometimes low, sometimes new market).<br />

But the most surprising and promising<br />

of the disruptive innovations will come<br />

from the bottom of the market pyramid<br />

with new ways of delivering food security,<br />

education, and healthcare, etc., for millions<br />

of consumers in emerging markets.<br />

end disruption is a customer who is not<br />

willing to pay for premium products but<br />

is happy with a good enough product.<br />

For many companies, such clients are<br />

not very attractive because they are the<br />

least profitable customers.<br />

But once the disruptors have entered<br />

this market, they seek to improve profit<br />

margins by offering additional value<br />

in small doses, so customers might be<br />

willing to pay a little more for better<br />

quality. The incumbent operators, on<br />

the other hand, do not spend too much<br />

time or thought on the least profitable<br />

customers and instead concentrate on<br />

the most profitable ones. Over time, the<br />

incumbents are squeezed into smaller<br />

markets. By the end, it is the disruptive<br />

innovator that serves the largest market<br />

segment and earns the greatest revenue,<br />

whereas the former market leaders have<br />

a niche existence or are driven out of the<br />

market. “New market disruption,” on<br />

the other hand, occurs when a product<br />

serves a new or emerging consumer desire<br />

that is not being served by existing<br />

market players.<br />

Disruptive innovations tend to be<br />

produced by outsiders<br />

So why is it so hard for disruptive innovators<br />

to make their way? And why<br />

are they so often outsiders with no – or<br />

only loose – ties to incumbents in the<br />

markets? There are at least three reasons<br />

why: 1) Innovations are not profitable<br />

enough at the beginning; 2) these processes<br />

can take longer to develop and<br />

results may be so new that they cannot<br />

be compared to other products; 3) it cannot<br />

be evaluated and does not fit into<br />

conventional risk schemes.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 13


Renevue and time<br />

Professor Joseph Bower came to the point when writing a<br />

Harvard Business Review article in 2002: “When the technology<br />

that has the potential for revolutionizing an industry emerges,<br />

established companies typically see it as unattractive: it’s not<br />

something their mainstream customers want, and its projected<br />

profit margins aren’t sufficient to cover big-company cost<br />

structure. As a result, the new technology tends to get ignored<br />

in favor of what’s currently popular with the best customers.<br />

But then another company steps in to bring the innovation<br />

to a new market. Once the disruptive technology becomes<br />

established there, smaller-scale innovation rapidly raise the<br />

technology’s performance on attributes that mainstream<br />

customers’ value.”<br />

Comparing apples and oranges<br />

Comparing unknown new markets with known traditional<br />

markets is a bit like comparing apples and oranges, as Milan<br />

Zeleny knows. In an article for the <strong>International</strong> Journal of<br />

Management and Decision Making, he wrote: “The effects of high<br />

technology always breaks the direct comparability by changing<br />

the system itself, therefore requiring new measures and new<br />

assessments of its productivity. High technology cannot be<br />

compared and evaluated with the existing technology purely<br />

on the basis of cost, net present value or return on investment.<br />

Only within an unchanging and relatively stable TSN [technology<br />

support net] would such direct financial comparability be<br />

meaningful. For example, you can directly compare a manual<br />

typewriter with an electric typewriter, but not a typewriter<br />

with a word processor. Therein lies the management challenge<br />

of high technology.”<br />

Dr. Elmer Lenzen is founder and CEO of macondo<br />

publishing GmbH, publisher of the <strong>Global</strong> <strong>Compact</strong><br />

<strong>International</strong> <strong>Yearbook</strong> and the CSR Academy. He has<br />

a PhD in journalism and studied at the universities<br />

of Münster and Bochum (both in Germany) and<br />

the UCR in San José (Costa Rica). In 1998 Lenzen<br />

founded macondo, with its major business focus being<br />

publications and corporate communication. CSR plays<br />

a prominent role, and macondo today is one of the<br />

leading publishing houses.<br />

Fallen Brands<br />

There can be different reasons for the<br />

decline of a brand. It may be that the<br />

product is no longer trendy, or that it<br />

is regarded as being old-fashioned. It is<br />

fatal when a company stops developing<br />

the brand, making it harder to catch up<br />

with competitors. “Successful products<br />

decline when companies continue to<br />

produce beyond the trends of the time,”<br />

says Wolfgang Zankl from the European<br />

Brand Institute, which ranks the most<br />

valuable brands in Europe annually.<br />

In no industry sector are the pressures<br />

of innovation and market changes more<br />

pronounced than in the IT sector, as these<br />

three following examples show.<br />

The Commodore 64. Due to its shape,<br />

its fans affectionately called it the “bread<br />

box.” The Commodore 64 dominated the<br />

home computer market in the 1980s:<br />

More than 30 million copies were sold<br />

worldwide. But when the PC began<br />

to take hold in the market, the era of<br />

Commodore ended. In 1994, the manufacturer<br />

went out of business.<br />

AOL. Do you remember the CDs in<br />

your mailbox or the ones glued into<br />

magazines? They came either from<br />

CompuServe or AOL and offered dial-up<br />

internet service. At the beginning of the<br />

millennium, AOL had almost 30 million<br />

customers and was the largest internet<br />

provider worldwide. Money was abundant,<br />

so they took over the prestigious<br />

media group Time Warner. Then came<br />

the market bubble and the advent of<br />

internet flatrates. Today, AOL belongs<br />

to Verizon and is looking for new business<br />

models.<br />

BlackBerry. With the invention of the<br />

first smartphone, BlackBerry wrote<br />

history. Its founder, Mike Lazaridis, did<br />

so many things right. If you wanted<br />

to be someone 10 years ago, you had<br />

to have a BlackBerry in your pocket.<br />

BlackBerry was THE status symbol and<br />

the favorite gadget of managers and<br />

starlets. But then came Apple, which<br />

brought us the endless world of apps.<br />

Bye-bye BlackBerry.<br />

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innoVAtion<br />

Capitalism<br />

is<br />

CHAOS<br />

The future belongs to those companies that continuously<br />

challenge and reinvent themselves. Does this sound to you<br />

like it came from a recent executive seminar? It is certainly<br />

possible that it could have. But did you know that this idea<br />

was formulated more than a hundred years ago by a 28-yearold<br />

economics wunderkind, who was without a doubt one of<br />

the most important economists of the 20th century? Did you<br />

know that many of his ideas are perhaps even more pertinent<br />

today than they were in his own time? The Austrian economist<br />

Joseph Schumpeter (1883-1950) brought us concepts such<br />

as “innovation,” “venture capital,” and “corporate strategy.”<br />

Decades before innovation became a buzzword for managers,<br />

Schumpeter expanded the field of modern economics with<br />

these concepts – at a time when people were still talking<br />

about national economics. His concept of “creative destruction”<br />

enriched the three classic factors of production – land,<br />

labor, and capital – with an essential fourth dimension:<br />

entrepreneurship.<br />

Schumpeter’s core idea is that markets tend not toward<br />

order but disorder, which then invariably generates new,<br />

innovative entrepreneurs. Disorder is therefore productive<br />

rather than threatening: Progress and growth emerge from<br />

“creative destruction.” This view put Schumpeter far ahead<br />

of his time: Today, by contrast, creative destruction and innovation<br />

are more relevant than ever. In an era when the<br />

framework conditions are in constant flux, the strength of a<br />

company is no longer determined by its size, but by its speed<br />

and adaptability.<br />

His logic of “creative destruction” is radical, its consequences<br />

brutal: In Schumpeter’s view, all rules, systems, processes,<br />

products, and services will eventually have served their<br />

purpose and require renewal – or will not have served their<br />

purpose and therefore need replacing all the more. Schumpeter<br />

was the first to interpret the modern economic order<br />

scientifically, as an evolutionary development without end,<br />

a constant flow that evinces progress through revolutionary<br />

inventions and fitful bursts of innovation.<br />

At the same time, his economic theory brings a touch of<br />

individual psychology to the economic debate by amending<br />

the doctrine that the main driver in commerce is homo<br />

oeconomicus – the rational actor. Instead, it is the mavericks<br />

and inventors who bring about disorder and change, those<br />

actors who go beyond the conventional path. Schumpeter<br />

rejects the conventional, liberal equilibrium thinking about<br />

supply and demand. The problem in practice is that innovation<br />

is never accepted wholeheartedly; creative destroyers<br />

are usually not welcome in companies, even if the corporate<br />

mission statement promises otherwise. Companies are geared<br />

more toward recognizing risks and then bringing them under<br />

control. But activists of innovation will not stand for avoiding<br />

risk through risk management.<br />

This makes Schumpeter the first important economist to<br />

think consistently in processes, forgoing models. But this<br />

economics wunderkind made enemies, too: Schumpeter<br />

was intentionally provocative. He considered science an<br />

ongoing attempt to “produce, improve, and pull down analytical<br />

structures in an unending sequence.” This is how he<br />

takes swipes at the giants of economics, reproaching Adam<br />

Smith for describing a largely pre-capitalist world that is no<br />

longer applicable today, Karl Marx for having understood<br />

the dynamics of capitalism but nothing of the psychology of<br />

prosperity, and Schumpeter’s own contemporary John Maynard<br />

Keynes for concerning himself with only shortsighted<br />

prescriptions, in the form of political instruction manuals.<br />

But Schumpeter is not immune to criticism either: He believed<br />

– perhaps overly naively – in the social permeability<br />

of the capitalist system. Thus, he considered success and<br />

wealth to be ephemeral values specific to the individual:<br />

“The upper strata of society are like hotels which are indeed<br />

always full of people, but people who are forever changing.”<br />

But the practice is different in the present day, when<br />

we are instead experiencing the emergence of a heritable,<br />

moneyed aristocracy around the world, the feudalization<br />

of the political class and the financial markets, and the reproletarianization<br />

of the workforce.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 15


A Bridge to<br />

Sustainability-Oriented Innovation:<br />

Breakthroughs<br />

“Innovate or die” has become almost a mantra for companies in this era of rapid technological change and<br />

globalization. When we consider such conditions as extreme air pollution in Beijing, factory collapses in<br />

Bangladesh, drought in California, and deadly heat waves in India, the darker side of this foundational<br />

belief stands out in high relief. Yet we continue to settle for and cling to consumption-based business models<br />

that add to these global threats. Many large companies have survived and thrived for decades by selling<br />

high-calorie, sugary drinks or distributing apparel made by people working in extreme poverty for unfair<br />

wages in unsafe conditions.<br />

By Prof. Jason Jay, Sergio Gonzalez, and Marine Gerard<br />

Overcoming these challenges and enabling societies to<br />

thrive on a planet with increasingly finite resources will<br />

take significant innovation. We call this sustainabilityoriented<br />

innovation (SOI).<br />

SOI is about dispelling the notion of tradeoffs between what<br />

seem to be competing goals — performance versus impact,<br />

profit versus purpose, human wellbeing versus environmental<br />

protection. Our research suggests that when we no longer see<br />

these goals as competing, we create products, services, and<br />

business models that are holistic rather than fragmented.<br />

The potential for SOI exists within all firms. We just need to<br />

understand the barriers to unleashing it. Our research suggests<br />

that one critical barrier to achieving SOI is the “sustainability<br />

tradeoff” view of the world, a mental model<br />

that says having a positive social and<br />

environmental impact must exist<br />

as a tradeoff with more<br />

traditional business drivers.<br />

the late 1990s, it started to develop an organizational commitment<br />

to environmentally responsible shoe design. One of its<br />

early forays into this work was the “Trash Talk” shoe, a shoe<br />

made from scraps of discarded material. The intended social<br />

value was to find a productive use for<br />

cutting-floor waste in the factories.<br />

Less waste meant using less energy,<br />

less water, and fewer<br />

chemicals.<br />

Let us look at Nike as an<br />

example of a company that<br />

discarded its tradeoff model. In<br />

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innoVAtion<br />

But the shoe was a commercial failure. Customers did not<br />

find it aesthetically appealing, and Trash Talk did not have<br />

all the performance characteristics that Nike athletes had<br />

come to expect from their footwear. For Nike, succeeding<br />

with SOI meant holding firm to its commitments to both<br />

performance and impact. While Trash Talk had been a<br />

“compromise,” moving along the tradeoff line, they needed<br />

to push the envelope.<br />

The impact / performance frontier<br />

After an extensive search and invention process, Nike took a<br />

very different approach from the one they had been using.<br />

On the impact dimension, they sought to achieve zero waste<br />

on the cutting room floor, a standard that far exceeded any<br />

they had set in the past. On the performance dimension,<br />

they sought to make shoes lighter and more breathable. By<br />

committing to achieving both performance and impact, Nike<br />

had let go of its either / or approach. The result was Flyknit, a<br />

new technology that involved weaving the upper portion of<br />

the shoe from a single thread. They had learned what artists<br />

have long understood — that constraint generates innovation.<br />

For Nike, holding impact and performance constraints<br />

simultaneously led them to an entirely new way of producing<br />

athletic footwear.<br />

Nike Flyknit technology involves weaving the upper portion<br />

of a shoe from a single thread. It reduces the shoe’s overall<br />

environmental footprint and at the same time increases its<br />

athletic performance with lighter weight and flexibility.<br />

By creating a new way to manufacture its popular running<br />

shoes, Flyknit produced what Nike CEO Mark Parker summed<br />

up as an innovation with “the potential to change everything.”<br />

Flyknit is a mainstream product, marketed as a high-performance<br />

shoe. Its sales are projected to surpass $ 1 billion in<br />

<strong>2016</strong>, which for a single shoe is an astounding accomplishment<br />

given Nike has a footwear business worth $ 18.3 billion in total.<br />

In our example, Flyknit hit the SOI sweet spot and tackled<br />

all three constraints simultaneously by creating<br />

customer value by increasing comfort and<br />

running performance; creating<br />

business value by cutting<br />

production time and costs, and<br />

addressing mainstream customer needs with significant<br />

market potential; creating system-wide environmental<br />

and social value by reducing landfill waste and reducing the<br />

need for labor-intensive, low-wage work.<br />

The customer-business-system constraints<br />

We know that successful SOI does not occur in isolation<br />

but through collaboration. Dutch start-up DyeCoo Textile<br />

Systems B.V. completely revamped Nike’s textile dyeing by using<br />

an entirely waterless process called ColorDry, which reduced<br />

water demand by 100-150 liters of water (26-40 gallons), reduced<br />

dyeing time by 40 percent and energy use by 60 percent,<br />

and reduced the factory footprint needed for production by<br />

25 percent. DyeCoo’s technology was a game-changer.<br />

Although Nike Flyknit and DyeCoo ColorDry have both proven<br />

to be powerful technological innovations, SOI is not limited<br />

to cutting-edge technologies. It also has impact at the organizational,<br />

institutional and social levels.<br />

“<br />

Innovation allows<br />

companies to reap<br />

the benefits of products<br />

and services that<br />

create social and<br />

environmental good.<br />

Types of sustainability-oriented innovation<br />

”<br />

Consider new intra-company “process” innovations such as<br />

Buffer’s transparent salary bulletin and calculator, Tesla Motors’<br />

“system infrastructure” changes such as its international<br />

EV supercharging network, and Uber’s new “delivery and<br />

business model” innovation for car-sharing taxi alternative.<br />

These are all prime examples of the versatility of SOI across<br />

the organizational, institutional, and societal levels of innovation.<br />

They all work within different boundaries of change<br />

— from individuals to the inside of firms, firms to the inside<br />

of states, and states to the inside of society. In pursuing these<br />

bigger, more systemic solutions, SOI embraces a wide swath of<br />

commercial and civic stakeholders. Entrepreneurs, corporate<br />

intrapreneurs, policymakers, NGOs, investors, academics, and<br />

active citizens all play a role in SOI success.<br />

Embracing such diversity dispels the notion of single-player<br />

innovation and focuses instead on increasing opportunities<br />

for growth and scale through a multistakeholder approach.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 17


Important<br />

performance<br />

focused<br />

Sustainability-Oriented<br />

innovation<br />

Performance<br />

“Compromise”<br />

Impact<br />

focused<br />

Not Important<br />

impact<br />

Important<br />

With this wider perspective and more diverse population of<br />

stakeholders, it becomes possible to tackle the big challenges<br />

more effectively and to be part of the solution that creates a positive<br />

future for business and society at large. In our subsequent<br />

blog posts, we explore the types of firms and strategies that can<br />

mesh with SOI, and the process of multi-stakeholder innovation.<br />

Why sustainability-oriented innovation is valuable in<br />

every context<br />

Sustainability, sometimes under the banner of corporate social<br />

responsibility (CSR), used to be a specialty practice used by<br />

only a few companies, like Nike and Coca-Cola, to manage<br />

risks to their high-value brands.<br />

But times have changed, and as we described in our first<br />

post, Nike is now using sustainability to drive the top line by<br />

enhancing product development and revenue growth with<br />

technologies such as Flyknit. Start-ups such as Liquiglide and<br />

its super-surfactant products, unicorns such as Uber and its ondemand<br />

transportation service, and large systems integrators<br />

such as Lockheed Martin with burgeoning renewable energy<br />

and energy storage systems are combining sustainability with<br />

revenue generation in various ways. Sustainability-oriented<br />

innovation is the basic enabler of this trend.<br />

Because SOI allows companies to push beyond their usual innovation<br />

boundaries and their typical business protocols, it is<br />

expanding the range of businesses that are practicing sustainability<br />

and finding new fuel for their innovation processes.<br />

It is also allowing them to reap the benefits of products and<br />

services that create social and environmental good.<br />

The context and intent around SOI influences its final shape<br />

and form. Our research has identified three degrees of sustainability<br />

orientation: sustainability-relevant, sustainabilityinformed,<br />

and sustainability-driven.<br />

The three degrees of SOI<br />

The most common form of SOI in the mainstream corporate<br />

world is sustainability-informed innovation (SII). The<br />

aim of SII is to meet a well-defined customer need using a<br />

design informed by sustainability considerations. Nike and<br />

its Flyknit technology discussed in our first post offer a good<br />

example of SII.<br />

Many “green” brands and internal labels, such as Clorox<br />

Greenworks and Johnson & Johnson’s Earthward program, also<br />

fit this category. Some companies, such as Patagonia, build<br />

their whole R&D portfolio around SII. Since its founding in<br />

the 1970s, Patagonia’s mission statement has evolved from<br />

“build the best product” to “use our business to inspire and<br />

implement solutions to the environmental crisis.”<br />

With this mission statement in mind, sustainability has become<br />

integral to Patagonia’s innovation process, which has resulted<br />

in products such as “synchilla” fleece made from recycled<br />

plastic bottles and the recent Yulex wetsuit — the first biomaterial-derived<br />

wetsuit in the surfing industry.<br />

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innoVAtion<br />

Sanergy builds healthy, prosperous<br />

communities by making hygienic<br />

sanitation affordable and accessible<br />

throughout africa‘s informal settlements.<br />

So far 732 Fresh life toilets are installed<br />

in informal settlements.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 19


Sustainability:<br />

A positive side effect.<br />

Sustainability:<br />

One of the inputs.<br />

Sustainability:<br />

The core purpose.<br />

Sustainability-<br />

Relevant<br />

Innovation<br />

(SRI)<br />

E.g. Zipcar<br />

Sustainability-<br />

Informed<br />

Innovation<br />

(SII)<br />

E.g. Patagonia<br />

Sustainability-<br />

Driven<br />

Innovation<br />

(SDI)<br />

E.g. Sanergy<br />

The partnership between Patagonia and Yulex paired each<br />

firm’s core competencies in materials technology to enable<br />

the creation of the world’s first sustainable wetsuit. Their SOI<br />

was then shared with the rest of the surf industry, and now<br />

the same environmental technology can be found in almost<br />

all brands’ premium wetsuits.<br />

Nike Flyknit and Patagonia Yulex illustrate two benefits that<br />

companies reap through SII. The first is that sustainability<br />

constraints help drive a wider search for new materials, new<br />

processes, and new designs that can yield higher-performance<br />

products. The second is that SII creates possibilities for differentiation<br />

among sustainability-minded customers. In this way,<br />

it manages risks and opportunities as customer preferences<br />

and regulations change.<br />

Sustainability-driven innovation (SDI) is another kind of SOI that<br />

innovates with the specific goal of solving a public problem. An<br />

example of technology-based innovation would be renewable<br />

energy companies such as SunPower, which are developing<br />

high-efficiency solar photovoltaic panels to mitigate the air<br />

and climate pollution associated with fossil fuels.<br />

Other enterprises, such as Sanergy, achieve SDI through businessmodel<br />

innovation. Sanergy is an MIT spinoff established to<br />

solve sanitation problems in the developing world. Knowing<br />

that nearly 8 million people in Kenyan slums lacked access to<br />

a proper sanitation, the Sanergy team used $ 25,000 from the<br />

MIT Public Service Center to test their solution. They installed<br />

two toilet stations and franchised them out to local entrepreneurs,<br />

who maintained them and charged for use. Sanergy<br />

safely collected the waste and converted it into fertilizer that<br />

could be sold to farmers. The pilot was so successful that in<br />

2011 the team formed a for-profit and non-profit business to<br />

continue its work. The for-profit arm developed and sold the<br />

toilet stations and waste fertilizer. The non-profit arm supported<br />

the franchisees and infrastructure with training and services.<br />

Sanergy’s results are impressive and include:<br />

• installation of 734 toilets<br />

• 33,000 daily uses<br />

• removal and treatment of 6,028 metric tons of waste<br />

• creation of 763 jobs<br />

In addition, local entrepreneurs, 35-40 percent of whom are<br />

women, are making a profit of at least $ 1,000 per year; organic<br />

fertilizer made from the waste sells for 30 percent less than<br />

inorganic alternatives; and local school attendance increased<br />

20 percent after schools purchased toilets, which gave parents<br />

more confidence to send their children to class.<br />

The third form of SOI, sustainability-relevant innovation (SRI),<br />

is the most broadly applicable but the least discussed. SRI is<br />

about discovering and leveraging hidden sustainability benefits<br />

after innovation. Zipcar and the car-sharing revolution are<br />

prime examples. The practice dates back to the late 1980s in<br />

Europe with the rise of programs such as Mobility Switzerland<br />

and StattAuto Berlin. Convenience and cost-savings were the<br />

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innoVAtion<br />

“<br />

We know that<br />

successful SOI doesn’t<br />

occur in isolation<br />

but through<br />

collaboration.<br />

”<br />

original value drivers of the innovation. The success of these<br />

programs in providing superior benefits over owning a car<br />

led to wide adoption in the United States and Europe. In addition,<br />

membership exploded once internet technology made<br />

it possible to streamline business operations.<br />

Zipcar rode this wave after debuting in Boston in June 2000,<br />

and its leadership quickly realized that this new business<br />

model had tangible sustainability benefits as well. Entering<br />

into public-private partnerships with cities such as Baltimore<br />

made Zipcar aware that their business was encouraging people<br />

to sell their cars, avoid buying new ones, take fewer trips, drive<br />

fewer miles per trip, walk and bike more, and take public<br />

transit more often.<br />

SRI can also grease the wheels for SII and SDI projects. Consider<br />

GE’s “Ecomagination” strategy. When it began, GE focused<br />

on identifying the environmental benefits of their existing<br />

products, such as more energy efficient appliances and engines.<br />

By marketing these benefits to customers, employees,<br />

investors, and other stakeholders, GE established broader<br />

legitimacy of an SOI approach. From that foundation, GE<br />

was able to undertake SII and SDI projects. EcoSwitch — a<br />

tea kettle, slow cooker, hot plate, and blender combined into<br />

one energy-efficient package — is an SII product, and Open<br />

Innovation was an SDI project that called for innovators to<br />

solve water scarcity and energy challenges in international<br />

communities struggling with those issues.<br />

Although one form of SOI may have significantly greater scale<br />

or impact than another, all three are beneficial. The sum reduction<br />

in GHG emissions from car-sharing (SRI, Zipcar) and the<br />

GHG emission reductions achieved by replacing petroleumbased<br />

neoprene with e-fiber in wetsuits (SII, Patagonia) are<br />

both beneficial, even though the former clearly will have a<br />

larger-scale impact than the latter.<br />

Each of these three SOI variations will have its own area of<br />

impact. SIIs will tend to include mainstream consumption<br />

channels and foster shifts in industry impact. SDIs will tend<br />

to push the envelope and be very specific in focus. And the<br />

impact of SRI will be in discovering and leveraging hidden<br />

sustainability benefits after innovation.<br />

Whether technological, organizational, institutional, or social<br />

innovation, SOI practitioners will benefit by recognizing the<br />

need for an ecosystem of SOI that will accommodate the entire<br />

spectrum of impact.<br />

Another positive by-product of SRI for Zipcar was the unanticipated<br />

recruitment of allies for its business. Cities and<br />

universities came to see it as an eco-friendly alternative to car<br />

ownership, with the added benefit of fewer regulatory barriers<br />

and lower parking prices.<br />

How sustainability factors into SOI<br />

These behavioral changes all entailed real social and environmental<br />

benefits. Although more research is needed around their<br />

quantification, better air quality, less traffic congestion, and<br />

more physical activity are highly likely. Zipcar stumbled upon<br />

these sustainability benefits as a free and positive side effect of<br />

its business-model innovation and made it possible for people<br />

to drive within a new sustainability-oriented context. The result<br />

of Zipcar’s SRI activities was nothing short of industry-shaking.<br />

Prof. Jason Jay is a Senior Lecturer and Director of the<br />

Sustainability Initiative at MIT Sloan. Sergio Gonzalez<br />

is a graduate student in the MIT Technology and Policy<br />

Program. Marine Gerard is a 2014 graduate of the MIT<br />

Sloan School of Management currently working as an<br />

associate at the Boston Consulting Group. The article was<br />

originally published in the Sloan Management Review.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 21


Does firM innoVAtion<br />

AffeCt ?<br />

CSR<br />

WHat tHe aCaDeMICS SaY<br />

Is a sustainable company more innovative or, vice versa, is an innovative company more<br />

in favor of sustainability? and is there any link between innovation and CSr? two notable<br />

academic studies help us to answer these questions. the first one is from rui Shen, Yi tang,<br />

and Ying Zhang and was published as a Harvard Business School Working paper in <strong>2016</strong><br />

using a sampling of 3,315 publicly listed US firms from 2001 through 2011. the second study<br />

was conducted by xinghua Gao and Yonghong Jia, both from Governors State University,<br />

Illinois, and published in September 2015. to better understand how different aspects of<br />

CSr influence corporate innovation outcomes, the authors examined five social dimensions:<br />

community, diversity, employee relations, the environment, and products.<br />

What do the studies tell us?<br />

The most important finding is that, yes, there is a positive link<br />

between CSR and innovation. Shen, Tang, and Zhang write:<br />

“We find that more innovative firms also engage more in CSR<br />

activities. This effect is stronger for firms of higher risk and/<br />

or operating in a less munificent environment. Additionally,<br />

firms with higher innovation reap greater financial benefits<br />

from their CSR activities.”<br />

Innovation is risky<br />

Innovation is considered by most experts as being a key factor<br />

in determining a company’s ability to maintain advantages<br />

against its competitors. The more a company is willing to,<br />

and capable of, inventing and reinventing itself, the better<br />

it can respond to fast – and often abrupt – market changes.<br />

This is a well-known fact. But few efforts have been made “to<br />

examine whether or not innovation may influence a firm’s<br />

other strategic choice,” write Shen, Tang, and Zhang. This<br />

is all the more extraordinary because innovation activities<br />

are highly complex and have uncertain outcomes – traits<br />

that normally produce sleepless nights at the C-level and<br />

among investors. Innovation means limited control of the<br />

process and always implies risk. That is why companies with<br />

less-open cultures or control-obsessed management are less<br />

innovative by nature.<br />

How does CSR come into the game?<br />

CSR helps to reduce the level of uncertainty and the information<br />

asymmetry between the company and its main<br />

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innoVAtion<br />

stakeholders by serving as a credible signal. It is a fact that<br />

companies with a good CSR reputation maintain a good<br />

social image in the eyes of the public – they accumulate<br />

moral capital, in a manner of speaking. This moral compass<br />

can help to “identify emerging problems, prevent fraud,<br />

preserve corporate reputation, and minimize any penalty<br />

when transgression occurs,” say Shen, Tang, and Zhang. That<br />

creates a reaction: To meet potential concerns, an innovative<br />

company must be motivated to engage more in CSR. Gao and<br />

Jia write: “CSR enhances innovation because CSR initiatives<br />

help foster a culture for employees to be creative, enhance<br />

firms’ access to external financing, and form an enthusiastic<br />

and effective workforce.”<br />

Key findings<br />

1. Companies featuring greater innovation record higher<br />

levels of CSR.<br />

2. This correlation becomes stronger when the company’s risk<br />

level is higher or when it is operating in a less munificent<br />

market.<br />

3. The positive effects of innovation on CSR are stronger for<br />

companies with greater financial leverage.<br />

4. CSR brings more financial benefits to companies well known<br />

for their innovation performance.<br />

5. Companies scoring high on CSR performance obtain better<br />

price terms from capital suppliers.<br />

6. These positive financial effects are weaker when market<br />

munificence is higher.<br />

Intel and the first DraM<br />

Sustainable stakeholder management is nowadays an essential<br />

element of modern corporate management. a practical<br />

example as to why stakeholder inclusion is so crucial<br />

goes back to the early 1970s. In 1970, Intel planned to<br />

invest in the mass production of the first semiconductor capacitor,<br />

the 1 kilobit “1103” DraM (dynamic random access<br />

memory). this type of memory storage was the cornerstone<br />

of the digital age, revolutionizing our daily lives, our work<br />

environments, and our leisure time. DraM was a “disruptive<br />

innovation,” to use the words of Clayton Christensen.<br />

However, in 1970, Intel’s engineers were concerned about<br />

the potential negative consequences of the new DraM<br />

technology. Harvard Business School authors quote some<br />

colleagues: “there was a lot of resistance to semiconductor<br />

technology on the part of the core memory engineers. the<br />

engineers didn’t embrace the 1103 until they realized that it<br />

wouldn’t make their skills irrelevant.” additional resistance<br />

came from suppliers and distributors because they had to<br />

invest in specialized equipment and new facilities that would<br />

be of no use for other forms of production. they had no<br />

idea about whether semiconductor innovation would make<br />

its way onto the markets. Intel agreed to hold discussions.<br />

though initial production in 1970 was below standard, five<br />

modifications of the production line were necessary before<br />

the product could finally take its victory lap in late 1971.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 23


Decarbonization<br />

“<br />

The Paris Agreement is a victory<br />

for people, for the common good, and<br />

for multilateralism. It is a health<br />

insurance policy for the planet.<br />

It is the most significant action in<br />

years to uphold our Charter mandate<br />

to ‘save succeeding generations.’<br />

”<br />

Ban Ki-moon, UN Secretary-General (2007 – <strong>2016</strong>)<br />

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innoVAtion<br />

Growth<br />

a HarD HaBIt to BreaK<br />

If we are to take the Paris Agreement on climate change seriously,<br />

growth-driven society is on the way out. But greed is part of the human<br />

condition, and no one knows what life without growth would be like.<br />

By Prof. Dr. Felix Ekardt<br />

In December 2015, countries around the world agreed to a<br />

new global climate treaty. The legal details are vague, but<br />

the overarching objective is clear and binding. The Paris<br />

Agreement stipulates that global warming be limited to well<br />

below 2 degrees Celsius. For an industrialized country such<br />

as Germany, which has high per capita emissions, the IPCC<br />

estimates that this would mean 95 percent fewer greenhouse<br />

gas emissions by 2040.<br />

The Paris Agreement targets a further limit of 1.5 degrees<br />

Celsius. The changes required to achieve this would have to<br />

happen even faster; developing countries would have to press<br />

ahead with these in the near term as well. The Paris targets<br />

are absolutely welcome, considering that the consequences<br />

of climate change threaten all of humanity. But what no one<br />

admits is that their implementation will likely lead to a world<br />

without growth.<br />

Protecting the climate and perpetuating growth can go hand<br />

in hand if we replace the fossil fuels we use for electricity,<br />

heating, fuel, and fertilizer by relying solely on technical options<br />

such as renewable energies and energy efficiency. New<br />

technology can be sold and growth achieved in this way. But<br />

technology alone will hardly get us to the aforementioned<br />

targets – even though, of course, no one can predict this<br />

today with any certainty. The challenge is simply too great.<br />

Tidy emissions projections<br />

Moreover, as our technology improves, our level of wealth<br />

rises, creating more emissions to deal with. We also lack<br />

effective technological solutions for some of the sources of<br />

emissions, such as agriculture. In addition, previous statistics<br />

and forecasts are based on tidily estimated projections. Industrialized<br />

countries such as Germany are supposedly reducing<br />

emissions, but in reality, the emissions from our way of life<br />

are increasing. We are simply shifting them onto developing<br />

countries, since this is increasingly where our consumer goods<br />

are coming from.<br />

Furthermore, all of this talk about climate is one-sided: Other<br />

environmental problems such as the degradation of soil and<br />

ecosystems pose just as much of a long-term, existential risk<br />

to humanity and need to be addressed at the same time. The<br />

solution is obvious: Give more space to nature. Technology<br />

alone is not enough for these problems, even less so than it<br />

is for the climate. Consequently, under the Paris Agreement,<br />

part of protecting the environment is about leading a more<br />

frugal lifestyle, in addition to using green technology. It is<br />

not enough just to drive more-efficient cars – we have to<br />

walk places more often, or go by bike, bus, or train. Cosmetic<br />

fixes such as massive reforestation to bind greenhouse gases<br />

will do almost nothing to remedy this inconvenient truth;<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 25


their scale would have to be enormous<br />

if we are to substantially reduce emissions<br />

that way.<br />

Emissions-free nuclear energy is no solution<br />

either. The risk of such facilities<br />

being attacked by terrorists is uncontrollable,<br />

at the very least, and their costs<br />

are exorbitant. The German debate over<br />

nuclear waste demonstrates precisely<br />

this fact. And if, rather than embracing<br />

undesirable frugality, experts suggest<br />

removing greenhouse gases from the<br />

atmosphere through methods such as<br />

seeding the oceans or carbon capture<br />

and carbon storage, we face the threat<br />

of equally incalculable risks and exorbitant<br />

costs.<br />

More frugality<br />

The shift to a more sustainable society,<br />

therefore, will not work unless we also<br />

shift our way of life. We need to consume<br />

less. But then less will be sold:<br />

significantly fewer leisure flights, and<br />

fewer cars. This implies that the end<br />

of the growth-driven society is upon us,<br />

first and foremost in those industrialized<br />

countries that are called upon to make<br />

progress on climate change under the<br />

Paris Agreement. Neither will we get away<br />

with visions of a purely service-oriented<br />

world without any environmental footprint:<br />

Services such as flights and IT technologies<br />

also use a good deal of resources.<br />

If we limited environmental protection<br />

purely to what was technically feasible,<br />

on the other hand, we would have to accept<br />

considerable environmental damage.<br />

This would mean tackling climate change<br />

only partially and would be tantamount<br />

to ignoring problems such as degraded<br />

ecosystems. In the long term, we would<br />

be destroying the physical foundations<br />

of our existence, and in the worst case<br />

this would happen through increased<br />

international and civil wars over dwindling<br />

food and water resources.<br />

But here is the big problem: Until now,<br />

central social institutions such as the<br />

labor market, the pension system, the<br />

banks, and the system of national debt<br />

have depended on growth. So far, alternative<br />

concepts to liberate them from the<br />

growth compulsion have hardly gone<br />

beyond individual ideas such as a reduction<br />

in the number of hours worked.<br />

Furthermore, we lack conceptions of<br />

how to make the difficult transition<br />

into the post-growth era without massive<br />

upheaval and social unrest – as we<br />

witnessed in the euro crisis countries,<br />

where growth turned into contraction<br />

in the briefest of times.<br />

Many adherents of post-growth evidently<br />

do not see this as a problem. Ultimately,<br />

they say, the contraction will gradually<br />

bring about an economy oriented toward<br />

solidarity and the common good,<br />

including the appropriate political majorities.<br />

They argue that people would<br />

be happier without capitalism because<br />

the competitive society would then become<br />

passé – that people are, in fact,<br />

primarily cooperative or even altruistic<br />

in nature, and only capitalism deforms<br />

them to be selfish. A world without<br />

growth, then, appears as the actualization<br />

of true human nature. But this<br />

misses the point.<br />

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innoVAtion<br />

Not everyone dreams of a happy life<br />

in the country<br />

As the research shows, happiness is<br />

relative. So it is less the Malaysia trip<br />

in itself that generates happiness than<br />

the ability to keep up with the Joneses.<br />

A more frugal life can therefore make<br />

a person happy if that person still feels<br />

acknowledged. But happiness levels<br />

also often increase when people have<br />

more than those around them, and not<br />

everyone dreams of growing their own<br />

food in agricultural cooperatives instead<br />

of going to the capitalist supermarket.<br />

The increase in mental health disorders<br />

in a globalized capitalism environment is<br />

not in itself proof that capitalism causes<br />

unhappiness. It used to be that someone<br />

who was sad would simply go see friends;<br />

nowadays, we diagnose depression and<br />

prescribe pills, which not least benefits<br />

the pharmaceutical industry and its<br />

continually new products.<br />

Capitalism is an important cultural<br />

influence. Nevertheless, sociobiology<br />

has demonstrated that human beings<br />

have a certain propensity for selfishness.<br />

Outside of the kind of directly<br />

life-threatening conditions as occurred<br />

in the Stone Age, our propensity for cooperation<br />

is often limited. Cooperation<br />

is particularly difficult when it has to<br />

take place internationally, as with the<br />

climate, rather than in relatively manageable<br />

small groups, as in the distant past.<br />

Therefore, we must count on clear and<br />

very short-sighted calculations of selfinterest,<br />

and among more groups than<br />

just managers and politicians.<br />

We are part of the growth world<br />

We are all interlinked in the growth<br />

world: through our jobs and our consumer<br />

desires, or our pension funds<br />

that own companies through their stock<br />

portfolios. And none of us – politicians<br />

included – always acts rationally. The<br />

all too human biases toward comfort,<br />

habit, repression, prestige, and the usual<br />

concepts of normality complicate any<br />

fundamental change. When I sit down<br />

on the emissions-heavy plane to Tenerife<br />

in February drizzle, I have absolutely<br />

no inkling of the climate disaster and<br />

limits to growth.<br />

Concepts for the post-growth world<br />

should not bank on a new kind of human<br />

being, lest they remain ineffective<br />

utopias. But change is possible. Calculations<br />

of self-interest, concepts of normality,<br />

and even values can evolve further as<br />

different actors interact. They will even<br />

have to – environmentally speaking –<br />

if we are to survive.<br />

Prof. Dr. Felix Ekardt is Director of the<br />

Research Unit Sustainability and Climate<br />

Policy in Leipzig, which he founded in<br />

2009. Since 2009, he has also been a professor<br />

for public law and legal philosophy<br />

at Rostock University (Faculty of Law).<br />

His scientific focus lies in issues around<br />

human science sustainability studies.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 27


The<br />

De-<br />

Carb<br />

Diet<br />

To comply with global climate targets, we have to reduce our carbon footprint – no ifs, ands, or buts.<br />

Nevertheless, there are a lot of challenges we need to face first.<br />

By Dr. Elmer Lenzen<br />

Last year’s UN Climate Conference in Paris was truly a<br />

historic moment for mankind and its sustainable development:<br />

The key result of the COP 21 was an agreement<br />

to set a goal to limit global warming to less than 2 degrees<br />

Celsius compared to pre-industrial levels. In addition, the<br />

conference also identified the enemy we have to fight: carbon<br />

dioxide (CO 2<br />

) and all the other greenhouse gases that are –<br />

as a matter of routine – converted into CO 2<br />

equivalents. To<br />

comply with the 2-degree goal, we have to reduce carbon<br />

emissions to almost zero by the middle of the 21st century. So<br />

the magic buzzwords in blogs, speeches, and the rumor mills<br />

are “decarbonization” and the “low-carbon” – or even better,<br />

“zero-carbon” – economy. But to be honest, carbon is not a<br />

problem per se. It is the foundation of life on this planet. The<br />

aggregate state of carbon is the problem: When it takes the<br />

form of a fossil in the ground, it is completely unproblematic.<br />

As a greenhouse gas in the air, it causes global warming. This<br />

is where all carbon strategies come in.<br />

Fossil fuel divestment. The Guardian offers a great explanation<br />

of this concept by writing: “The global movement for fossil<br />

fuel divestment is asking institutions to move their money out<br />

of oil, coal, and gas companies for both moral and financial<br />

reasons.” The concept arrived in mainstream thinking when<br />

the Rockefeller family said in March that they wanted to divest<br />

from fossil fuels as quickly as possible, including its holdings<br />

on ExxonMobil – the company that brought the Rockefellers<br />

their fabulous wealth.<br />

Carbon taxation. An oversized carbon footprint is not just<br />

a problem of the explorative and energy industry. It can be<br />

found in all sectors of the economy. This is why experts say<br />

that we have to put a price on carbon. Lise Kingo, Director<br />

of the UN <strong>Global</strong> <strong>Compact</strong>, is one of them: “We believe that<br />

setting a $100 internal price on carbon is one of the most<br />

effective ways to drive climate deep into corporate strategy<br />

and investment. While leading companies have taken steps<br />

to price carbon, we need to see an ascent in ambition and<br />

price across the board.”<br />

Public regulation. It is obvious that self-regulation of the markets<br />

does not work in driving decarbonization into the right<br />

direction, at the right pace. This is why an increasing number<br />

of public authorities are imposing regulations: California, for<br />

example, has very strict legislation, as Volkswagen is learning<br />

the hard way. The European Union and China follow next. Other<br />

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innoVAtion<br />

industrial sectors and more countries<br />

will be regulated to comply with the<br />

Paris Agreement. No one should hold<br />

any illusions.<br />

So we are putting the world economy<br />

on a de-carb diet. Is everything going to<br />

be fine? The goal may be clear, but the<br />

road is rocky and there are many challenges<br />

ahead.<br />

1. Challenge: Politics, or the temptation<br />

of the low-hanging fruit<br />

The critical issue, in short, is not 2030 or<br />

2050, but what happens afterward. Jeffrey<br />

Sachs, Guido Schmidt-Traum, and Jim<br />

Williams point out in a brilliant analysis<br />

that good intentions alone will not bring<br />

about true decarbonization. They argue:<br />

“There are reasons to worry. There are two<br />

paths to 2030. We might call the first path<br />

‘deep decarbonization,’ meaning steps<br />

to 2030 that prepare the way for much<br />

deeper steps after that. The second path<br />

could be called the way of ‘low-hanging<br />

fruit’ – easy ways to reduce emissions<br />

modestly, quickly, and at relatively low<br />

cost. The first path might offer little lowhanging<br />

fruit; indeed, the low-hanging<br />

fruit can become a distraction or worse.”<br />

What have we observed? Politicians<br />

around the world are fostering moreefficient<br />

power plants or mobility concepts<br />

and, true, they can improve their<br />

carbon footprints significantly. But these<br />

technologies might never be able to be<br />

geared toward a zero-carbon solution.<br />

But this is the long-term idea. Jeffrey<br />

Sachs reminds us that the easiest way<br />

is not the best. It is up to the politicians<br />

to explain this to their voters.<br />

2. Challenge: Capital markets, or<br />

how to incentivize mature markets<br />

The Climate Roadmap 2050 says that we<br />

have to reduce our carbon emissions by<br />

80 to 95 percent. You cannot do this with<br />

the present stock of industry. You have<br />

to invest in new plants and industrial<br />

processes. In practice, this means the<br />

industry must be “zero-emissions ready”<br />

by 2040 to guarantee an efficient and<br />

economically predictable infrastructure<br />

by 2050. These deadlines are only one<br />

– maximum two – major investment<br />

opportunities away. But in many sectors,<br />

we do not see investment being made. It<br />

is not because interest rates are high –<br />

on the contrary: They are almost at zero.<br />

It is because the expectations for profits<br />

are low. The case of Japan offers insight:<br />

Aging societies are consuming less and<br />

they are prone to deflation, zero GDP<br />

growth, and decades of stagnation. China<br />

and Europe might join the Japanese<br />

track. So how can we offer incentives to<br />

invest in sustainable solutions in such<br />

mature markets?<br />

3. Challenge: Entrepreneurship, or<br />

how to deal with immutable sectors<br />

Max Åhman and colleagues from Lund<br />

University point to the fact that the<br />

prospects for decarbonization are still<br />

relatively unexplored in many industrial<br />

sectors. The reason is that industries are<br />

still sheltered by their governments to<br />

protect jobs in spite of lost competitiveness.<br />

And when we talk about decarbonization<br />

or about imposing carbon taxes<br />

and regulations, we have to be honest<br />

and say that there will be losers. Refineries,<br />

for example, will have less importance<br />

– or even none at all. The chemical<br />

sector, relying on refinery byproducts,<br />

must also change fundamentally toward<br />

bio-based chemicals to find its place in<br />

the post-carbon economy. Look at the<br />

steel industry: There is no steel without<br />

coking, and there is no coking without<br />

carbon emissions. Abstaining from steel<br />

is not an option. In fact, a decarbonizing<br />

economy will have a growing demand<br />

for steel for new, sustainable industrial<br />

sites. This is a true challenge for zerocarbon<br />

entrepreneurs.<br />

4. Challenge: Growth of population,<br />

or the dilemma with the backlog<br />

demand<br />

There are many smart studies on the market<br />

calculating the effect of this or that<br />

measure. I am confident that they are correct.<br />

The challenge is not only to manage<br />

the already existing market but also to<br />

meet new demands in a sustainable way.<br />

Europe, for example, is enthusiastically<br />

developing a renewable-energy sector. So<br />

are we finally reducing our dependency<br />

on fossil energies? No, we are not. The<br />

US Energy Information Administration’s<br />

recently released <strong>International</strong> Energy<br />

Outlook <strong>2016</strong> projects that world energy<br />

consumption will grow by 48 percent<br />

between 2012 and 2040. Most of this<br />

growth will come from countries that<br />

are not in the Organisation for Economic<br />

Co-operation and Development (OECD),<br />

including countries where demand is<br />

driven by strong economic growth, particularly<br />

in Asia. Non-OECD Asian countries,<br />

including China and India, account<br />

for more than half of the world’s total<br />

increase in energy consumption over<br />

the projection period. Concerns about<br />

the energy security issues generated by<br />

renewables support the expanding use<br />

of fossil energy sources and nuclear<br />

power. There is nothing new about the<br />

dilemma with the backlog demand. We<br />

are still waiting for someone to offer a<br />

smart answer.<br />

5. Challenge: Shortages drive prices<br />

The biggest challenge lies in the mechanisms<br />

of the markets themselves. When<br />

a resource becomes scarce, this does not<br />

mean that producers look for alternatives.<br />

On the contrary. Scarcity means, first of<br />

all, a significantly higher demand than<br />

supply. This generates higher prices and<br />

profits. Market actors therefore will do<br />

everything possible to take advantage<br />

of this shortage. Even if their actions<br />

aggravate the situation, for example by<br />

overusing resources, they will not stop<br />

because the profits will continue to rise.<br />

This greed will not stop until all resources<br />

are consumed. Let us take a look at oil<br />

production: The high price of more than<br />

$100 per barrel in recent years did not<br />

lead to a turning away from oil production.<br />

On the contrary: Oil drilling was<br />

extended to remote areas, to oil sands,<br />

and especially toward fracking technologies.<br />

The often discussed “Peak Oil”<br />

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is not an argument in favor of decarbonization, it is rather<br />

a signal that the real big business with the black gold is just<br />

at the beginning.<br />

Measures to take<br />

• Honestly, a lot of expectations depend on disruptive innovations<br />

in the future. New players, new products, and new<br />

ideas will stir up the markets.<br />

• We have to use limited resources more intelligently: The<br />

circular and shared economies have shown us new business<br />

models that address this aspect.<br />

• Efficiency is not only a topic for engineers and graduates in<br />

business administration. It is foremost a topic for product<br />

designers and product developers. We have to form a new<br />

aesthetic that shows how cool it is to buy without packaging,<br />

to shop without plastic bags, and to live without disposables.<br />

• We will need a holistic calculation of costs. It is too simple<br />

to calculate a price without taking into account the up- and<br />

downstream supply chains. Sport shoe manufacturer Puma<br />

is a good example for showing us the way companies can<br />

do it. I do not know if this holistic calculation of costs must<br />

have an effect on the price itself, but it will have an effect<br />

on transparency and awareness-building. Such a holistic<br />

concept of costs, by the way, corresponds with the holistic<br />

concept of capital that the <strong>International</strong> Integrated Reporting<br />

Council is discussing.<br />

• Politicians will have to write the regulations. <strong>Global</strong> solutions<br />

are desirable but not obligatory. It is erroneous to believe<br />

that there is no alternative to globalization. National, or<br />

even regional regulations show us that there is always an<br />

alternative and competition is the way to improve systems.<br />

See how California emissions legislation is breathing fire<br />

into the belly of the EU administration.<br />

None of these descriptions offers a concrete, one-step solution<br />

for practitioners. This is up to you. You have to realize that<br />

corporate sustainability is a compass, not a map.<br />

Dr. Elmer Lenzen is founder and CEO of macondo<br />

publishing GmbH, publisher of the <strong>Global</strong> <strong>Compact</strong><br />

<strong>International</strong> <strong>Yearbook</strong> and the CSR Academy. He has<br />

a PhD in Journalism and studied at the universities of<br />

Münster and Bochum (both Germany) and the UCR in<br />

San José (Costa Rica).<br />

Jim Yong Kim<br />

World Bank Group President:<br />

“There is a growing sense of inevitability<br />

about putting a price on carbon<br />

pollution. In order to deliver on the<br />

promises of the historic Paris climate<br />

agreement, a price on carbon pollution<br />

will be essential to help cut<br />

emissions and drive investments into<br />

innovation and cleaner technologies.<br />

Prices for producing renewable<br />

energy are falling fast, and putting<br />

a price on carbon has the potential to<br />

make them even cheaper than fuels<br />

that pollute our planet.”<br />

Prime Minister<br />

Hailemariam<br />

Dessalegn<br />

Ethiopia:<br />

“We should now follow up the Paris<br />

Agreement with adequate actions,<br />

national policies, investment schemes<br />

and regional and international<br />

initiatives and partnerships. I iterate<br />

Ethiopia’s commitment to the global<br />

efforts to overcome dangerous climate<br />

change and ensure sustainable development.<br />

We will use every policy<br />

instrument, including carbon pricing,<br />

which is found to be effective,<br />

efficient and fair.”<br />

30<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong>


innoVAtion<br />

polItICal leaDerS Call For<br />

faster Action<br />

oN CarBoN prICING<br />

Chancellor<br />

Angela Merkel<br />

Germany:<br />

Mayor<br />

Eduardo Paes<br />

Rio de Janeiro:<br />

“Cities have a major role to play in climate<br />

change and actions made by mayors<br />

could save 45 Gt CO 2<br />

by 2030 – equivalent<br />

to eight times the current emissions<br />

of the United States. More than half of<br />

the people in the world lives in cities.<br />

Cities are responsible for over 70 percent<br />

of energy-related carbon emissions.<br />

In Rio we will decrease gases emissions by<br />

20 percent by 2020, and achieve carbon<br />

neutrality by 2065. Mayors are closer to<br />

the people, they can take actions faster.<br />

Carbon pricing will help us to implement<br />

the commitments we took in the Paris<br />

Agreement and foster the transition to<br />

a low carbon economy.”<br />

“With a price for carbon and a global carbon<br />

market, we can achieve our common<br />

goal – staying well below the 2 degree<br />

ceiling – in such a way that is technology<br />

neutral, promoting innovation, market<br />

based and thus cost efficient.”<br />

President<br />

François Hollande<br />

France:<br />

“The first chapter of the post-carbon era<br />

is being written under the French COP<br />

Presidency. As a frontrunner, the Panel<br />

has the mission to go further in this<br />

direction. We now need to make carbon<br />

pricing levels consistent with the Paris<br />

Agreement objective, to broaden the scope<br />

of covered emissions, and to initiate the<br />

convergence of carbon pricing schemes.”<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 31


Talents<br />

“<br />

When everyone is competing<br />

for the same kind of talent, you need<br />

a much clearer way of explaining<br />

how you will attract those people to<br />

your organization.<br />

”<br />

Jeff Joerres, CEO ManpowerGroup<br />

32<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong>


innoVAtion<br />

IS tHe<br />

Meaning<br />

of Work<br />

aBoUt to CHaNGe?<br />

By Rick Goings<br />

Our world is facing a crisis cubed: Jobs are disappearing<br />

faster than they are being created; companies<br />

are struggling to attract people with the right skills;<br />

and people rightly worry how new technology will threaten<br />

their livelihoods. These global challenges affect developing<br />

countries as much as highly industrialized economies. I have<br />

heard plenty of suggestions from all corners that this crisis<br />

can be solved by “creating more jobs.”<br />

It is increasingly clear to me that creating more jobs is not<br />

enough, nor is it the real solution. This solution is based on<br />

a big misunderstanding. To tackle this crisis cubed, we need<br />

to focus on not just jobs but on people earning incomes. This<br />

requires us to develop a new model of work.<br />

What is clear is that the transformations that are now taking<br />

place worldwide, resulting in the loss of jobs, are caused by<br />

forces we cannot alter. The disruption of our world of work is<br />

the result of a tectonic shift just as dramatic as industrialization<br />

and urbanization – and it is occurring along three fault lines:<br />

1. Technology: The speed and breadth of today’s innovation<br />

affect every single job and skillset. Automation, artificial<br />

intelligence, big data analytics, the internet of things, and<br />

mobile technologies are leveling the playing field – not only<br />

geographically but also across the spectrum of businesses,<br />

from large to small. Not all of this disruption is positive.<br />

New technologies could result in a net loss of more than<br />

5 million jobs by 2020, warns a recent World Economic<br />

Forum report.<br />

2. Talent: We are facing a massive skills gap. Today’s education<br />

systems simply cannot keep up with the rapid pace<br />

of change. Too many of today’s graduates are merely not<br />

business-ready for the jobs that now exist. For the rest who<br />

may not have the academic credentials and special skills,<br />

they face barriers as well, as the non-cognitive skills they<br />

might possess are often discounted.<br />

3. Millennials: In 10 years, the millennial generation will make<br />

up 75 percent of the global workforce. They are different,<br />

very different. Not only are they digital natives, they also<br />

have a different set of values; they want purpose in their<br />

lives, flexibility with their time, and a healthy work–life<br />

balance. More than half do not even want a job but want<br />

instead to do something on their own.<br />

This tectonic shift is tearing down many familiar features of<br />

the economic landscape to which we have become accustomed.<br />

Take corporations: Yes, they have been around for two centuries,<br />

and during their time were the primary creator of “jobs.”<br />

Yet, corporations as we have known them may soon have had<br />

their day. They will run out of skilled workers and will also<br />

fail to produce enough jobs to provide to those who want to<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 33


The whole world can’t be Bill Gates<br />

Rolling out the alternative to a job with the government or with<br />

a corporation requires focusing on start-ups, self-employment,<br />

self-made work, entrepreneurship. Yet, for most people, many<br />

of these notions conjure up images of larger-than-life figures,<br />

of a Bill Gates or Mark Zuckerberg or, perhaps, some teenagers<br />

who – fueled by takeaway pizza – burn the midnight oil<br />

coding new apps. When we hear terms like these, we think<br />

of a path that is risky, requiring top-level education, out-sized<br />

intelligence, and ambition to succeed.<br />

I will not offer a ready-made solution that will make our current<br />

crisis cubed simply go away. But I will offer that – in<br />

my 30 years of living and working in the Americas, Europe,<br />

and Asia – I have seen how income can be created by many<br />

outside the formal structures of government and corporations,<br />

and how people who have taken this route can thrive and<br />

shape their own futures.<br />

Company minus hierarchy equals collaboration<br />

work within the traditional definition of jobs. Additionally,<br />

millennials, who are fast becoming the core of the global<br />

workforce, have little appetite for jobs and careers, since they<br />

offer too much structure and too little personal fulfillment.<br />

What did people do before there were jobs?<br />

Neither governments nor companies can become sustainable<br />

engines of job creation. But then this crisis is not actually about<br />

“jobs.” In the early 19th century, what did people do before<br />

there were jobs? Well, certainly they worked – usually for<br />

themselves – in agriculture, as craftspeople, as tradespeople,<br />

or as part of their local economy in other ways.<br />

This “cottage industry” work lacked scale; it was local by necessity.<br />

When corporations came along in the 19th century,<br />

they simply took these workers, organized them, and – with<br />

the aid of steam-powered factories and early industrializing<br />

technology – created focus, efficiency, and scale. They brought<br />

us the big corporations we now have today, and that model<br />

worked for a long time. Yet, it is fast becoming obsolete.<br />

Today’s most valuable companies, such as Apple, employ a<br />

proportionally small number of people. At the same time, the<br />

job market is shrinking almost everywhere because of the<br />

forces mentioned above. We simply must change our model of<br />

work and look beyond traditional jobs, beyond governments,<br />

beyond corporations. We must develop concepts that provide<br />

the flexibility and resilience needed for people to thrive amidst<br />

this massive disruption.<br />

Take away the hierarchies of today’s corporations and what<br />

are we left with? At their core, companies are a collection of<br />

people engaged in collaborative efforts. It is this collaboration<br />

that is at the heart of our new model of work.<br />

Let us look at it from the perspective of individuals. What they<br />

need for success are business templates that leverage their skills,<br />

match their interests, and – most importantly – nurture<br />

the right mindset that will allow them to be collaborators in<br />

this emerging new economy. They should not just be trained<br />

with cognitive skills or STEM smarts but also non-cognitive<br />

skills such as creativity, self-discipline, resourcefulness, and<br />

endurance – none of which are measured by tests, and few<br />

of which are taught in school.<br />

People with those non-cognitive skills may not feel comfortable<br />

calling themselves entrepreneurs … but from a mindset perspective<br />

they are! And with the right tested templates, models,<br />

and tools, they will be able to generate an income that allows<br />

them to be independent and stand on their own two feet.<br />

Just last week I used my Uber app and was picked up by an<br />

older middle-aged woman who told me she previously had<br />

been cleaning houses a few days a week. Now, she proudly<br />

reported, she was making much more money and with the<br />

flexibility the work offered, was able to drop off and pick up her<br />

granddaughter from school each day. I asked what new skills<br />

she had to learn. “None,” she said. She already knew how to<br />

drive, she knew the area, and always loved meeting new people.<br />

WeWork, another disruptive business model, is a chain of<br />

shared office spaces that rents workspaces on a pay-as-you-<br />

34<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong>


innoVAtion<br />

Top 10 Skills<br />

in 2020<br />

1. Complex problem Solving<br />

2. Critical thinking<br />

3. Creativity<br />

4. people Management<br />

5. Coordinating with others<br />

6. emotional Intellegence<br />

7. Judgment and Decision Making<br />

8. Service orientation<br />

9. Negotiation<br />

10. Cognitive Flexibility<br />

in 2015<br />

1. vomplex problem Solving<br />

2. Coordinating with others<br />

3. people Management<br />

4. Critical thinking<br />

5. Negotiation<br />

6. Quality Control<br />

7. Service orientation<br />

8. Judgment and Decision Making<br />

9. active listening<br />

10. Creativity<br />

go basis for budding entrepreneurs. The spaces are actually<br />

working social incubators where, for example, a computer<br />

whiz meets up with a graphic designer. … Think Steve Jobs<br />

and Steve Wozniak.<br />

First, though, we need to flip any mismatched expectations;<br />

we have to help people realize that striking out on your own<br />

is not a necessity but an opportunity, and that the risk can<br />

be managed. Individuals should feel confident operating at<br />

whichever scale they feel comfortable – small and local, or<br />

dynamic, scalable, and global; fully independent or collaborating<br />

with a larger corporation.<br />

Lessons from the world’s most valuable companies<br />

Corporations, meanwhile, will have to abandon their traditional<br />

hierarchies and structures. Take the world’s two most<br />

valuable companies, Apple and Google: Their strength does<br />

not come from making things but from the collaboration<br />

within the huge ecosystems they have created. Think Nike, too.<br />

They are designers and marketers supported by collaborative<br />

companies and individuals.<br />

So to survive, corporations have to reinvent themselves as<br />

conveners of collaborators. That is their new template. They<br />

have to morph into collaborative ecosystems – with their<br />

own rules and community ethos – in which individuals can<br />

plug in their skills. The collaboration economy can be our<br />

new model of work. This may require companies to change<br />

their business models; or it could be as simple as introducing<br />

dynamic and flexible procurement systems.<br />

I will make no bones about it: The transition to this collaboration<br />

economy will not be easy. It cannot be. The three fault lines<br />

– technology, talent, and demographics – have ruptured, and<br />

the disruption brought on by this tectonic shift is simply too big.<br />

But I am an optimist at heart, not least because, during my<br />

entire career, I have met so many people who were able to<br />

turn their lives around simply because they were given the<br />

right template and mentoring.<br />

It is now our job to spot the opportunities in the disruption<br />

and equip people not just to cope but to thrive beyond jobs<br />

and beyond corporations.<br />

Rick Goings is Chairman and Chief Executive Officer of Tupperware<br />

Brands Corporation. He served as a petty officer in the US Navy<br />

during the Vietnam Era. Following this, he founded the fire detector<br />

distributor Dynamics, Inc. After his sale of the company, he worked<br />

in various positions with Avon, including President of Avon USA.<br />

In 1992 he joined Tupperware Worldwide as the CEO. This article<br />

was originally published by the World Economic Forum’s Agenda.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 35


By Prof. Dr. Harald Hagemann<br />

Industry 4.0<br />

How does<br />

Affect Growth<br />

and Employment?<br />

With the digitilization and global linking of production<br />

– the “fourth Industrial Revolution” – the<br />

specter of unemployment in the technology sector<br />

has entered central stage again. In its special report on June 25,<br />

<strong>2016</strong>, on Artificial Intelligence, The Economist proclaimed “The<br />

return of the machinery question,” which first had been posed<br />

in serious economic literature by David Ricardo in 1821. Since<br />

then, a controversy between labor-displacement pessimism<br />

and compensation optimism has run through the economic<br />

literature as well as public policy debates.<br />

Although this controversy gained steam every time greater technological<br />

dynamism led to higher unemployment, Schumpeter<br />

pronounced this controversy “dead and buried.” However, the<br />

current debate, which led authors such as Brynjolfsson and<br />

McAfee to proclaim the “second machine age,” contradicts the<br />

author who stated that “creative destruction” is the essential<br />

fact of capitalism.<br />

Schumpeter’s term of creative destruction indicates well the<br />

double-sided nature of technological change, which, on the<br />

one hand, destroys old jobs and firms and leads to an erosion<br />

of old qualifications and shrinking sectors, but, on the other<br />

hand, stimulates the creation of new jobs, firms, and the rise<br />

of new sectors. This raises three important questions for the<br />

economy as a whole:<br />

1. Do the compensation effects balance, or even dominate,<br />

the displacement effects?<br />

2. Do the new technologies require higher or lower skill levels<br />

than the old ones?<br />

3. How do the new technologies influence the distribution of<br />

income? In particular, do new labor-saving technologies<br />

contribute to higher levels of inequality regarding income<br />

and wealth distribution?<br />

36<br />

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innoVAtion<br />

Since the future is uncertain and there are many other<br />

economic, political, and social factors beyond new technologies<br />

that will influence the development of employment,<br />

skills, and distribution, reliable empirical predictions are<br />

almost impossible to make. However, it is relatively easier<br />

to make predictions about the future prospects of existing<br />

jobs that are at risk than about new jobs being generated<br />

due to the diffusion of the new technologies. Thus, in the<br />

widely cited study The Future of Employment. How Susceptible<br />

Are Jobs to Computerization? by Frey and Osborne from Oxford<br />

University, the authors came to the result that 47 percent<br />

of existing jobs in the United States are in danger of being<br />

replaced by computer capital soon. A similar study for Germany<br />

found that 59 percent of the jobs are at risk due to<br />

the digital revolution.<br />

Deeper analysis reveals that the probability of being replaced<br />

by computer capital varies widely between different groups<br />

of employees. Whereas academics in scientific and creative<br />

professions, such as doctors, chemists, and physicists, are<br />

hardly affected, office jobs and auxiliary workers in transport<br />

and logistics are extremely vulnerable to automation.<br />

Most studies found that the decisive issue is whether the job<br />

concerned pursues a routine activity, and not whether it is a<br />

blue-collar or white-collar job. Brynjolfsson and McAfee have<br />

pointed out that the second machine age is characterized by<br />

a bifurcation – or job polarization – between two groups<br />

of employees: unskilled, low-paid workers whose work is<br />

dictated by computers, and highly paid, skilled ones who are<br />

managing Industry 4.0.<br />

Is this time different? Partly yes. Whereas past technological<br />

revolutions frequently created disadvantages for low-skilled<br />

workers whose jobs could be easily eliminated due to the<br />

diffusion process of new, more productive technologies, the<br />

digital revolution also affects medium-qualification levels. In<br />

their book The New Division of Labor. How Computers Are Creating<br />

the Next Job Market, Levy and Murnane have already predicted<br />

this lower demand for middle skills. This is because progress<br />

in the new information and communication technologies<br />

enables the automation of more complex tasks that are<br />

based on certain rules and routines, such as the handling<br />

of tax declarations.<br />

In a study from January <strong>2016</strong> for the World Economic Forum<br />

in Davos entitled The Future of Jobs. Employment, Skills and Workforce<br />

Strategy for the Fourth Industrial Revolution, which was based<br />

on a poll survey of the leading managers of the 350 largest<br />

companies, a net loss of 5.1 million jobs is predicted for the<br />

leading economies in the period 2015–2020. This would be the<br />

result of a reduction of 7.1 million routine jobs, which would<br />

be countered by the creation of only 2.1 million jobs, mainly<br />

in the IT technology sector. As a consequence, an increase<br />

in human capital in fields such as mathematics, computer<br />

1st<br />

Mechanization,<br />

water power,<br />

steam power<br />

2nd<br />

Mass production,<br />

assembly line,<br />

electricity<br />

3rd<br />

Computer and<br />

automation<br />

4th<br />

Cyber physical<br />

Systems<br />

and natural sciences, and engineering is being demanded,<br />

including a higher share of women in these areas to avoid<br />

a structurally higher unemployment rate for women in the<br />

future. A study of the labor market research institute IAB in<br />

Nuremberg from August 2015 is much less pessimistic in its<br />

prediction of a net loss of 60,000 jobs by 2025 due to Industry<br />

4.0 in Germany. An important point is the emphasis that not<br />

only academics but also higher-skilled workers will be among<br />

the winners of the digital revolution, if they acquire the additional<br />

skills necessary for the future linking of industrial<br />

production with computer technologies. This indicates the<br />

importance of research and education as a prohibitive labor<br />

market policy to avoid higher unemployment in the technology<br />

sector in the future.<br />

One need not deplore every job loss due to technological change.<br />

A good example is the use of industrial robots to replace workers<br />

who once were employed lacquering cars and who suffered<br />

high rates of cancer due to breathing in poisonous steams. New<br />

technologies imply risks and chances. The restructuring of<br />

economies – from an older industrial economy to a modern<br />

one – strengthens the options for “green growth” strategies. The<br />

digital revolution not only makes greater material productivity<br />

possible or creates efficiency in the use of natural resources,<br />

but it also generates a general reduction in the absolute use<br />

of non-renewable resources. This may help in contributing<br />

toward the requirements of sustainable development – in<br />

the economic as well as the ecological and social dimensions.<br />

This also makes the greater synthesis of two hitherto widely<br />

independent developments necessary: the digital revolution<br />

and strategies for coordinated sustainable development policies,<br />

which first became an issue at the United Nations Conference<br />

on Environment and Development in Rio de Janeiro in 1992,<br />

and were further specified in the worldwide agenda of the<br />

Millennium Development Goals in 2000.<br />

Dr. Harald Hagemann is professor of macro-economics<br />

and economic theory at the Universität Hohenheim.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 37


future Markets<br />

“<br />

In this ever-changing society,<br />

the most powerful and enduring<br />

brands are built from the heart.<br />

They are real and sustainable. Their<br />

foundations are stronger because<br />

they are built with the strength of the<br />

human spirit, not an ad campaign.<br />

The companies that are lasting are<br />

those that are authentic.<br />

”<br />

Howard Schultz, CEO Starbucks<br />

38<br />

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innoVAtion<br />

HoW to BUSt tHe<br />

Biggest Myths<br />

aBoUt tHe CIrCUlar<br />

eCoNoMY<br />

Tired of being told the circular economy is just a fancy term for recycling that will cause profits to slump?<br />

Here’s how to fight back.<br />

By Liz Goodwin<br />

When China began to emerge as one of the major<br />

global economies, the dominance of English as<br />

a global business language was challenged by<br />

Mandarin. Would this lead to barriers? Apparently not. The<br />

reality is, it does not matter what language you speak, as long<br />

as it is the universal language of business.<br />

Some say that the premise of the circular economy gets lost<br />

in translation and is misunderstood. There is a perception<br />

that it is an ongoing battle between environmentalists and<br />

corporations – that one side wants to see the environment<br />

preserved and protected, and that the other prioritizes profits.<br />

But the circular economy connects both, in fact, delivering<br />

economic as well as environmental gains.<br />

Despite the growing case for the circular economy, barriers still<br />

exist. As former CEO of Kingfisher, Sir Ian Cheshire, recently<br />

wrote, there are “examples of deliberate blocking of progressive<br />

business policies by dinosaur corporates that claim they<br />

cannot adapt to the new economy.” So, if you are confronted<br />

with this attitude, here is a basic translation reference for the<br />

circular economy – a handy rebuttal guide.<br />

Perception: The circular economy is just another way to<br />

describe recycling<br />

Reality: The circular economy is much more than recycling.<br />

A linear economy makes, uses, and disposes of materials. The<br />

circular economy looks at all the options across the chain<br />

to use as few resources as possible in the first place, keep<br />

resources in circulation for as long as possible, extract the<br />

maximum value from them while in use, then recover and<br />

regenerate products at the end of service life. This means<br />

designing products for longevity with reparability in mind<br />

so that materials can be easily dismantled and recycled, not<br />

to mention the alternative business models that encompass<br />

trade-ins, sharing models, and service packages.<br />

Perception: Encouraging people to reuse or keep<br />

products for longer does not encourage sales, so profits<br />

would slump<br />

Reality: In the United Kingdom, there is a saying: “The customer<br />

is always right.” In France, they say: “Le client n’a jamais tort,”<br />

meaning the customer is never wrong. In Germany the saying<br />

is: “Der Kunde ist König,” the customer is king. There is a clear<br />

status quo to prioritize customer satisfaction. Currently, we are<br />

being shortsighted and building products without longevity<br />

in mind, which costs UK businesses some £ 400 million a year<br />

in product returns. A circular economy encourages people to<br />

keep products in circulation for longer, which creates business<br />

opportunities for service packages that include repairs and<br />

maintenance services and drives customer loyalty.<br />

A colleague recently returned from South Korea, where he<br />

was exploring LG Electronic’s approach. Like a doctor’s surgery<br />

practice for electronics, customers can take their broken<br />

products to LG’s service-repair center, where they are issued<br />

with a ticket and seen by a technician, who fixes it on the spot.<br />

Perception: The circular economy might be an<br />

opportunity for some, but it will have a negative impact<br />

on manufacturers<br />

Reality: Natural resource and materials prices are rising, and<br />

they are also volatile. Refurbishment and remanufacturing<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 39


Perception: The top priority is the economy and jobs,<br />

especially in times of austerity<br />

Reality: The president of the European Commission, Jean-Claude<br />

Juncker, has said he wants to focus on jobs and growth, and<br />

rightly so. There are a number of routes to get to a destination,<br />

but the end result will be the same. Jobs and economic<br />

growth are no exception, and one possible route to achieve<br />

this ambition is growth of the circular economy.<br />

Life Cycle<br />

Thinking<br />

<strong>Global</strong>ly, Innovate UK claims resource-efficiency measures<br />

could add $ 2.9 trillion to the economy by 2030, with returns<br />

on investment of more than 10 percent. There are also major<br />

job opportunities. WRAP and Green Alliance recently identified<br />

that more than 200,000 jobs could be created in the United<br />

Kingdom if circular economy activities continued to grow.<br />

In a recent report, the World Economic Forum and the Ellen<br />

MacArthur Foundation also identified that a shift in reusing,<br />

remanufacturing, and recycling products could lead to more<br />

than half a million jobs being created in the recycling industry<br />

across Europe.<br />

Perception: If the environment is on the agenda,<br />

shouldn’t the top priority be climate change?<br />

offers are sheltered from these fluctuations. Walter Stahel,<br />

originator of the circular economy concept, recently said that<br />

if a businessman suggests opening a manufacturing plant to<br />

make money, you should counter that they can make five<br />

times as much from opening a remanufacturing plant.<br />

Greater circularity can also benefit existing manufacturers.<br />

Rolls-Royce, for example, is known for the “power by the hour”<br />

service model, and Caterpillar is known for its remanufacturing<br />

arm, Cat Reman. More recently, Jaguar Land Rover embedded<br />

circularity into its design and assembly process and is using<br />

50 percent recycled aluminum in some of its latest car models.<br />

Considering that cars are so reliant on aluminum, a high-value<br />

material, it makes economic sense to use recycled content.<br />

Perception: The circular economy may be the latest<br />

buzzword, but my business has been steady for years,<br />

why change now?<br />

Reality: It was only 10 years ago that we would happily rent a<br />

video and turn pages of a newspaper. Now online streaming<br />

and internet news prevail. Many businesses that were once<br />

leaders have disappeared as new trends have emerged, such as<br />

internet shopping and digital technologies. Business as usual<br />

is not always the safest path. The companies that prioritized<br />

short-term profits rather than future-proofing themselves<br />

ultimately paid the price. The sooner that businesses understand<br />

ways in which to adapt to change, the less is the risk<br />

of a hard blow.<br />

Reality: The circular economy could go a long way toward<br />

helping reduce carbon emissions. According to a recent report<br />

by the Carbon Trust, Innovate UK’s Knowledge Transfer<br />

Network, and Coventry University, remanufacturing typically<br />

uses 85 percent less energy than manufacturing; on a global<br />

scale, it has the potential to offset more than 800,000 tons of<br />

CO 2<br />

emissions per annum.<br />

And remanufacturing is just one component of the circular<br />

economy. In its first phase between 2005 and 2009, WRAP’s<br />

Courtauld commitment – a voluntary agreement aimed at<br />

improving resource efficiency within the UK grocery sector –<br />

avoided 3.3 million tons of CO 2<br />

-equivalent emissions, equal<br />

to an airplane flying around the world half a million times.<br />

Liz Goodwin became CEO at WRAP in 2007, having joined<br />

in 2001 as the first Director of Materials Programme.<br />

Under Liz’s leadership, WRAP has been at the forefront in<br />

helping to create a more sustainable world, to the benefit<br />

of the environment, economy, and society. One of WRAP’s<br />

leading areas of work is preventing and tackling food waste.<br />

Through ground-breaking voluntary agreements, such as the<br />

Courtauld Commitment, and behavior change campaign,<br />

Love Food Hate Waste, this work has helped reduce UK<br />

household food waste by 21 percent. Originally published in<br />

the Sustainable Business section of The Guardian.<br />

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innoVAtion<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 41


Sharing<br />

Has Been Hijacked<br />

The “sharing economy” is today’s buzzword for Silicon Valley’s most recent<br />

batch of billion-dollar companies. So ring the headlines: $ 51 billion valuation<br />

for Uber; Chinese ride-hailing business Didi Kuaidi raising $ 4.42 billion; Airbnb<br />

valuation $ 10+ billion. In the last three years, the world has embraced this idea<br />

of the sharing economy. Who would have thought that a 23-year-old part-time<br />

student tooling around in her Prius would disrupt the transportation industry?<br />

Or that renting out your spare bedroom with the Star Wars sheets could make<br />

you part of the largest hotel network in the world?<br />

By Lily Cole and Adam Werbach<br />

Is it just us or is there something a bit awkward about<br />

marrying “sharing” with “billion dollars”? Unless you are<br />

sharing a billion dollars, which would be rather cool. In<br />

reality, it is millions of people “sharing” to produce a handful<br />

of billionaires. Riddled with contradiction, it brings to mind a<br />

pseudo-communist dictatorship with a well-groomed leader.<br />

The word “share” comes from the Old English word scearu,<br />

related to sceran (“to cut”) and is recorded in the late 16th<br />

century as having meant “to divide one’s own and give part<br />

to others.” Note the word “give” in there. The Latin origin for<br />

“give” is muni and is found in words such as communication<br />

and community: We share our words; we share in communities.<br />

Sharing has been an important part of humanity’s mutual<br />

ability to distribute resources and sustain relationships since<br />

the time of fire and caves. We share with our families, we share<br />

with our friends, and in some places we still share with our<br />

neighbors. Sharing creates community, social cohesion, and<br />

the identity of the group. Real sharing thus is in the realm of<br />

giving and was never a transactional endeavor.<br />

Therefore, sharing does not seem to be the most fitting description<br />

for technical platforms that enable users to pay to<br />

use one another’s underutilized resources, be it homes or<br />

cars. “Rent” might be a better word. “Rent” in the mid-15th<br />

century meant “to rent out property, grant possession and<br />

enjoyment of in exchange for a consideration paid.” Although<br />

modern rental platforms offer enormous value – enabling<br />

trust between strangers and a partial deconstruction of hierarchical<br />

economies on the peer-to-peer level (albeit with the<br />

same macro-ownership structures) – they do not reflect the<br />

sentiment of sharing that has defined communities as communities<br />

for thousands of years.<br />

Well, yes. We believe so. And not because we are not fans of<br />

rental platforms – we are – but in the miasma of lumping<br />

everything together as the “sharing economy,” there is the<br />

threat of distorting and confusing both the meaning of sharing<br />

and the very real and silent sharing economy that sits like a<br />

backdrop to our reality.<br />

So what is the real sharing economy? It includes libraries and<br />

buses, roads and parks, power systems and water supplies,<br />

courts and rummage sales, charity shops and bulletin boards,<br />

community gardens and universities. This is not just about mobile<br />

apps. We estimate the entire sharing economy represents<br />

well over $ 15 trillion in assets. To put things in perspective,<br />

the headline-grabbing, venture-backed “sharing economy” is<br />

worth about $ 130 billion. That is less than 1 percent of the<br />

broader sharing economy. To allow the “sharing economy” to<br />

be understood as Uber and Airbnb would be to understand<br />

the “music economy” to be Taylor Swift and Adele.<br />

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innoVAtion<br />

Perhaps the term “sharing economy” is self-consciously contradictory.<br />

The definition of economy is “the state of a country or<br />

region in terms of the production and consumption of goods<br />

and services and the supply of money.” So we are explicitly<br />

making sharing transactional, turning it into a market. Consider<br />

then the even broader culture of sharing: thanksgiving lunches,<br />

helping a friend move, Christmas gifts, giving a stranger directions.<br />

The UK government reckons that the informal gift<br />

economy is in fact larger than GDP.<br />

Technology allows us to safely and efficiently share outside<br />

our circle of trusted friends and family. There has been a<br />

wellspring of apps and platforms to better enable sharing<br />

between strangers. Both of us were attracted to the idea of<br />

building start-ups that encouraged genuine sharing. Using<br />

technology to enable better distribution of resources spoke<br />

to our aspiration of addressing planetary challenges at scale<br />

and speed. Reddit, CouchSurfing, Kiva, IndieGoGo, Etsy, Waze,<br />

Mozilla, and Wikipedia all represent the type of scaled community<br />

power that could be applied to the sharing of our time<br />

and our things. Respectively, we built Impossible and Yerdle<br />

to further these goals.<br />

There is a lot at stake. By the end of the century, the Earth<br />

will be home to 10 billion people. It cannot accommodate us<br />

all if we all consume resources like the Americans and British<br />

of today. We would need three planet Earths to support us.<br />

We will jointly use what we have, or we will die fighting each<br />

other for the last bits of water, atmosphere, phosphorous, and<br />

arable land. Jointly using what we have – sharing – is one<br />

of our best chances for survival.<br />

There is a massive opportunity for people who wish to serve<br />

the planet to take hold of new technological tools and outinvent<br />

those who would consume our common assets. We<br />

invite you to join us in rewiring the economy so that everyone<br />

can benefit from the bounty of the Earth. We have trillions of<br />

dollars of underutilized resources that need to be unlocked.<br />

The challenge of our generation is to get more out of every<br />

tomato, drill, mile of road, and hour of boredom. That is the<br />

only way we will stretch our resources across 10 billion people.<br />

And developing systems that foster cooperation and mutual<br />

benefit is fundamental. The benefits belong to all of us.<br />

Lily Cole is founder of the social giving network Impossible,<br />

and Adam Werbach is founder of Yerdle, a people-powered<br />

store in which all of the inventory comes from members.<br />

The post was originally published on Medium.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 43


Start-Ups<br />

aBoUt Do-GooDerS,<br />

MoNeY-BUrNerS, aND SoCIal eNtrepreNeUrS<br />

United States<br />

the world’s most valuable start-ups<br />

The sharing economy is the buzzword for tech start-ups these<br />

days. Whether talking about Uber or Airbnb, these young and<br />

innovative companies are among the most valuable startups.<br />

However, this period of soaring growth might come to<br />

an end. Voices such as those of venture capitalist Bill Gurley<br />

and Satya Nadella, CEO of Microsoft, advocate more caution<br />

with investments in this area. Both say corrections are overdue<br />

in the market. This could well lead to changes in the list<br />

of billion-dollar start-ups. One more point to add: Corporate<br />

responsibility is another element these top start-ups should<br />

add to their business models.<br />

Valuation of the 10 most valuable venture backed private companies<br />

total equity funding<br />

Uber $ 51.0 b $ 7.4 b<br />

Xiaomi $ 46.0 b $ 1.4 b<br />

Airbnb $ 25.5 b $ 2.3 b<br />

Palantir $ 20.0 b $ 1.5 b<br />

Snapchat $ 16.0 b $ 1.2 b<br />

Didi Kuaidi $ 16.0 b $ 4.0 b<br />

Flipkart $ 15.0 b $ 3.0 b<br />

SpaceX $ 12.0 b $ 1.1 b<br />

Pinterest $ 11.0 b $ 1.3 b<br />

Dropbox $ 10.0 b $ 0.6 b<br />

https://www.statista.com/chart/3904/worlds-most-valuable-startups/<br />

As of october 2015<br />

Source: statista / The Wall Street Journal<br />

Brazil<br />

Fresh ideas for banking<br />

With the new competition “InovaBra,” Bradesco is helping to<br />

foster start-ups and has promised to implement 10 ideas into<br />

its own product and service portfolio. Young companies that<br />

intend to participate can present their innovations in the following<br />

areas: improvements in services, methods of payment,<br />

digital channels, new security technologies, new solutions for<br />

smart phones, and future banking. The invention has to be<br />

developed enough so that it can be adopted in the coming<br />

years within any area of the bank.<br />

“We are already thinking about what to offer in the nextgeneration<br />

bank,” says Maurice Gerais, Bradesco’s Executive<br />

Vice-President. “This is a project where everyone wins: the<br />

customer of Bradesco, who has access to innovative products<br />

and services; the bank, which maintains its tradition<br />

and pioneering role, creating a new channel to generate<br />

innovation; and the start-ups, which have the opportunity<br />

to leverage business in partnership with a major supporter,”<br />

adds Gerais.<br />

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innoVAtion<br />

Start-ups are innovative motors for fresh ideas from outside.<br />

That is why they are increasingly drawing the attention of large companies.<br />

This trend can be observed globally. Here are some markers.<br />

United Kingdom<br />

For start-ups, it’s not easy being green<br />

The world needs smart new players to meet global challenges<br />

such as climate change. But when young entrepreneurs try to<br />

promote their environmentally friendly business ideas, they get<br />

a lot of pushback from investors as well as customers. This is<br />

the result of a recent study from the Warwick Business School<br />

(WBS). One of the reasons for the disillusion is that entrepreneurs<br />

focus too much on their own values and beliefs instead<br />

of listening to their stakeholders. Balancing “what matters to<br />

me” with “what matters to them” is the principal challenge.<br />

“Their ambitions to ‘break free’ and enact their hopes and<br />

dreams to make a difference often need to be tempered by the<br />

realities of attracting investors and other stakeholders whose<br />

primary goal is making money and not environmental issues,”<br />

says Deniz Ucbasaran, one of the study’s authors and a professor<br />

at WBS who spoke to the Journal of Business Venturing. “This<br />

led some entrepreneurs to question if it was all worth it, as<br />

they had to compromise the scope of their ‘green’ ambitions.”<br />

Tanzania<br />

electricity for tanzania<br />

Standardized containers equipped with a photovoltaic battery<br />

hybrid system provide remote areas in Africa with clean energy<br />

around the clock. In Tanzania, the pilot plans of Rafiki-Power<br />

bring electricity to domestic and business customers. The<br />

system can be used anywhere in the world independently.<br />

Thus, the business model can be transferred to other African<br />

or Asian countries. “We bring not only light in the sector but<br />

also help the people to learn about television or the internet.<br />

You can compare prices and offers, and their products are more<br />

marketable,” says project manager Daniel Becker.<br />

India<br />

Few companies put CSr money into incubators<br />

India became the first country in the world to force companies<br />

by law to invest in sustainability programs. The official<br />

Schedule VII list tells companies what they can do to comply<br />

with CSR regulations. Of the 10 possibilities are “contributions<br />

or funds provided to technology incubators located within<br />

academic institutions which are approved by the Central Government.”<br />

But only a few companies have put CSR money into<br />

these incubators, reports the Hindustan Times. All over India,<br />

there are more than 100 incubators associated with the legal<br />

regulations, each of them coaching about a dozen start-ups.<br />

But raising money for CSR business is hard. The main reason<br />

seems to be that companies investing in CSR start-ups do not<br />

get returns on their investments because the returns are given<br />

to society. “CSR funding in incubators is an interesting option<br />

but may not be sustainable for building a start-up ecosystem<br />

for the longer term. That is better done by capital that will<br />

look for returns also, as that will ensure more competitive<br />

start-ups take root,” says Alok Bardiya, Director of Corporate<br />

Development at Cisco.<br />

The project is part of the Corporate Accelerator program named<br />

Agile, which E.ON launched in 2013. Agile helps innovators<br />

to realize their business ideas in the field of flexible energy<br />

solutions and to develop marketable business models.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 45


Changemaker<br />

ˈtʃeındʒˌmeıkə<br />

Be the change that you wish to see in the world,<br />

Mahatma Ghandi said. In a time of profound<br />

political, environmental, and social upheavals,<br />

examples are more important than ever. In our<br />

category “Changemaker,” we introduce women<br />

and men who are making credible contributions to<br />

sustainable development. Most of us desire change,<br />

but there is only a small group of people who are<br />

acting to make that change happen. That makes<br />

them exceptional. And we are proud to introduce<br />

them through interviews and individual profiles.<br />

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ChAngeMAker<br />

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Angelina Jolie has transformed herself from troubled teen star<br />

into the queen of hearts with her tireless humanitarian campaigning.<br />

From the crisis in Cambodia to the current global refugee situation,<br />

the 41-year-old star is always on the frontlines of change.<br />

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THE<br />

PEACEFUL<br />

PUNK<br />

I<br />

n modern society, fame and philanthropy appear to go<br />

hand in hand – and upholding the appearance of “giving<br />

something back” is a vital part of modern celebrity.<br />

But for actress Angelina Jolie, her dedication and relentless<br />

campaigning on behalf of others sometimes tip the scales in<br />

the other direction: humanitarian first, Hollywood star second.<br />

Once a troubled starlet, Jolie has seemingly dealt with her own<br />

demons by focusing her energy on trying to limit the suffering<br />

of others. Having grown up in Los Angeles, she struggled<br />

with depression, drug abuse, and self-harming throughout her<br />

youth. Her father, actor Jon Voight, left her mother, actress<br />

Marcheline Bertrand, when Jolie was barely one. This experience<br />

– coupled with the feeling that her own family was not<br />

as wealthy as those of her peers at Beverly Hills High School –<br />

left her feeling disenfranchised.<br />

In spite of her early success as an actor, Jolie remained deeply<br />

troubled, and she says her humanitarian work has helped<br />

heal some of her deeper wounds. “It’s a big difference, but<br />

all the pain I went through when I was younger was my way<br />

of trying to get to where I am now,” she confesses. “I wasn’t<br />

happy with how things were for me because I thought I wasn’t<br />

accomplishing enough, and all the characters I played in my<br />

films were leading much more interesting lives than I was.”<br />

In 2001, while filming Lara Croft: Tomb Raider in Cambodia,<br />

Jolie found herself moved by the plight of those living in the<br />

war-torn country. On her return home, she contacted the<br />

United Nations High Commissioner for Refugees (UNHCR)<br />

and began her enduring relationship with the United Nations<br />

Educational, Scientific and Cultural Organization (UNESCO),<br />

becoming an official ambassador the same year.<br />

“The basic thing was that I was searching for some greater<br />

purpose and goal in life, and when I started working with<br />

UNESCO and doing humanitarian work, I began feeling that<br />

I could point to something concrete that I was doing to help<br />

people who had very little hope,” Jolie explains.<br />

Celebrity endorsement, or even taking on a role as an ambassador,<br />

does not necessarily mean a star will “get their hands<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 49


“<br />

For over a decade<br />

I have been visiting<br />

refugee camps and<br />

orphanages and other<br />

places working with<br />

the United Nations<br />

and the UNHCR.<br />

”<br />

dirty” per se. But for Jolie, an important part of her work has<br />

always been to get out into the world and see the heartache<br />

and poverty for herself – to comfort the mother who lost a<br />

child in conflict and hear firsthand the plight of a teenage<br />

soldier forced into combat from a young age.<br />

Since 2001 she has gone on more than 40 field missions in over<br />

30 countries, from Pakistan to Sierra Leone. She has always<br />

covered her own costs and stayed in the basic accommodations<br />

provided for fellow aid workers – a far cry from the<br />

glamorous world of Hollywood. This altruism shines a light<br />

on those celebrities for whom column inches are everything.<br />

“There are many times when there are no media present, and<br />

many times in the past when I was working on the ground<br />

there was no immediate attention,” Jolie says. “For over a<br />

decade I have been visiting refugee camps and orphanages<br />

and other places working with the United Nations and the<br />

UNHCR. So I know what I’ve been able to contribute personally<br />

and in terms of creating greater public awareness of the<br />

issues at stake and the actual conditions of the people and<br />

children in various regions.”<br />

Naturally, the presence of such a high-profile personality can<br />

cause a furor that negates the good work they are trying to<br />

do. But the 41-year-old star is acutely aware of this dilemma.<br />

“There is a fine line to walk, but I’m very conscious of that line.<br />

Everywhere I go I try to balance the needs of field officers who<br />

are doing the real work and also serving the general interest<br />

of creating awareness, which can influence political decisions<br />

and public support, which are vital,” Jolie says. “I believe that<br />

after all this time, though, the public knows how serious and<br />

committed I am to the work I’m doing in these regions.”<br />

Though her mission has very much been global, Cambodia<br />

in particular has maintained a strong place in Jolie’s heart.<br />

In 2002, while married to actor Billy Bob Thornton, Jolie<br />

adopted her first child, seven-month-old Maddox Chivan, from<br />

an orphanage in Battambang, Cambodia. She later bought a<br />

property in the province in an attempt to maintain her son’s<br />

connection to his heritage. Unfortunately, the land was adjacent<br />

to Samlout National Park in the Cardamom Mountains and<br />

plagued by poachers who threatened the endangered species<br />

there. Jolie’s response was to buy the entire park and turn<br />

it into a wildlife reserve – named the Maddox Jolie Project.<br />

Along with three biological children, Jolie adopted her daughter<br />

Zahara from Ethiopia and son Pax Thien from Ho Chi Minh<br />

City in Vietnam. The path was by no means an easy one,<br />

though, as in each case, controversy surrounded the adoption<br />

process. In the case of Maddox, it was purely bureaucratic<br />

due to the United States temporarily banning adoptions from<br />

Cambodia amidst child trafficking allegations, but the ”trend”<br />

of celebrities adopting children from developing countries<br />

often raises the debate on how ethical the process is, with<br />

mothers coming forward afterwards – as was the case with<br />

Zahara, saying it was not her decision to put the child up for<br />

adoption in the first place.<br />

Regardless, one look at Jolie and husband Brad Pitt with their<br />

enormous and diverse brood proves it is possible to break down<br />

the conventions of traditional family and raise children who<br />

are happy, stable, and, above all, deeply loved.<br />

“When it comes to my children, I can see how important it is to<br />

be there for them and teach them things and to be with Brad and<br />

create this sense of a family unit,” Jolie says. “It’s also fascinating<br />

how the children react to Brad and I differently, and how<br />

each of us has a different connection to each of our children.”<br />

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when I was about nine,” recalls Jolie, who lost her mother to<br />

cancer. “She was very involved in Native American issues – she<br />

was part Iroquois Indian and French Canadian. And in the end,<br />

we started a foundation together for Native American people.<br />

It was instilled in me from a very young age how important<br />

it is to do nice things for other people. I saw how it made her<br />

life very happy and fulfilled.”<br />

She then adds, “The biggest lesson she taught me was that it’s<br />

the little things that often count the most in life. This was<br />

somebody who the world didn’t know about at all, but her<br />

simple acts of kindness left a huge impression. I still get letters<br />

from people who work in a dentist’s office, for example,<br />

who will tell me something she did for their daughter – or<br />

something she remembered that just stunned them, because<br />

it was so out of the blue and thoughtful.”<br />

Jolie and her husband have sought to instill in each of their<br />

children a sense of worldliness and gratitude for their incredible<br />

lives. The couple also try to involve their children in their<br />

humanitarian work and foster an awareness and empathy for<br />

the plight of others. Following Hurricane Katrina’s devastation<br />

of New Orleans in 2005, Pitt has worked tirelessly to rebuild<br />

homes and support families in the city’s Ninth Quarter, one<br />

of the worst hit neighborhoods.<br />

“We both feel inspired by the work we’re doing and particularly<br />

a project like Brad’s Make It Right [house-building] project,”<br />

Jolie says. “We lead very fulfilling lives. We both want the<br />

same things. We want to be as happy and connected as we<br />

possibly can be because the whole point of being a family is<br />

to share your love and caring with your children. We want<br />

our kids to always feel that we’re one big loving family taking<br />

this big adventure together.”<br />

In the same way Jolie strives to instill compassion in her own<br />

children, it appears her selfless attitude was nurtured by her<br />

mother, Marcheline. “From a very young age, I saw her doing<br />

aid work. She took me to an Amnesty <strong>International</strong> dinner<br />

Yet, astonishingly, there are still snipers taking shots at Jolie’s<br />

altruism and achievements. Following the recent announcement<br />

by the London School of Economics that Jolie is to be<br />

a visiting professor in practice as part of the MSc it offers in<br />

Women, Peacekeeping and Security, some have been quick<br />

to criticize the appointment, saying she lacks the academic<br />

credentials. That rather misses the point, and one can be sure<br />

that Jolie has come a long way since her troubled childhood,<br />

developing the thick skin she needs to deflect such detractors.<br />

“I’m a much stronger and better woman today,” she nods. “I’ve<br />

become a deeper and more understanding individual, and<br />

working for the UN and other missions has been a source of<br />

incredible satisfaction to me. It’s been so important to me to<br />

try to contribute as much as I can to these causes.”<br />

For an actress who is becoming more ubiquitous in the refugee<br />

camps of Syria than the hills of Hollywood, it is obvious.<br />

Written by Karen Anne Overton.<br />

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the<br />

proBLeM<br />

soLVer<br />

Alejandro Aravena<br />

they call it the “Nobel prize for architecture” – the pritzker architecture prize – one of<br />

the top awards given to architects. It is not only about craft but also mindset. this year, the<br />

Sustainable Development Goals Fund and the pritzker architecture prize have explored<br />

links between contemporary society and the role of architecture to improve livelihoods.<br />

The winner of this year’s prize is 48-year-old Chilean<br />

architect Alejandro Aravena, whose environmental<br />

and social engagement distinguishes him from many<br />

of his colleagues. His work “gives economic opportunity<br />

to the less privileged, mitigates the effects of natural<br />

disasters, reduces energy consumption, and provides<br />

welcoming public space. Innovative and inspiring, he<br />

shows how architecture at its best can improve people’s<br />

lives,” says Tom Pritzker, Chairman and President of The<br />

Hyatt Foundation.<br />

Aravena is leading a new generation of architects who<br />

have a holistic understanding of the built environment.<br />

He has clearly demonstrated the ability to connect social<br />

responsibility and economic demands with the design of<br />

a human habitat and the city. He epitomizes the revival<br />

of a more socially engaged architect, especially in his<br />

long-term commitment to tackling the global housing<br />

crisis and fighting for a better urban environment for all.<br />

“It is increasingly evident that more stakeholders will be<br />

required to meet the sustainability challenges of the future.<br />

At the same time, it is inspiring to explore how new<br />

sectors such as architecture can play a role by incorporating<br />

key dimensions of sustainable development, such as<br />

social justice and economic inclusion, in their plans,” says<br />

Paloma Duran, Director of the Sustainable Development<br />

Goals Fund. “For example, how we can ensure access for<br />

all to support adequate, safe and affordable housing and<br />

design spaces that enrich and promote social equality.”<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 53


Necessity is the mother of invention.<br />

For billions of people, this is a daily<br />

truth. Business school graduates<br />

reword it and say “doing more with<br />

less” is a disruptive innovation strategy.<br />

You have to take part in global needs as<br />

well as C-suite speeches to harmonize<br />

these two worlds. This is what<br />

distinguishes Navi Radjou, a French<br />

national born in India. A graduate<br />

of École Centrale Paris and the Yale<br />

School of Management, Radjou<br />

is a highly respected advisor who<br />

confesses that his creativity and ideas<br />

are deeply rooted in the South.<br />

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Doing More<br />

with Less<br />

The idea of frugal innovation – or Jugaad innovation<br />

(a Hindi word for mobilization) – is described in his<br />

successful books. “Frugal innovation is a way that companies<br />

can develop high-quality products and create more value<br />

with limited resources,” explains his publishing house. The<br />

Financial Times calls Radjou’s ideas “increasingly fashionable.”<br />

This thinking is truly sustainable. Radjou says: “Companies<br />

in the West spend billions of dollars to invent new products<br />

and to differentiate their brands from the competition. They<br />

charge customers more money for new features. The condition<br />

of this model in the West is more for more, but this model is<br />

running out of gas for three reasons. First, many customers<br />

in the West can no longer afford these expensive products.<br />

Second, we are running out of natural water and oil. And<br />

third, the growing income disparity between the rich and the<br />

lower classes disconnects existing products and services and<br />

basic needs of the customers.”<br />

Products for the so-called overlooked consumers have to be<br />

calculated with “razor-thin profit margins,” says Carlos Ghosn,<br />

CEO of Renault and Nissan. So what are examples of frugal<br />

innovation? One is M-Pesa, a mobile banking solutions from<br />

Safaricom in Africa. It offers even poor people the ability to<br />

conduct basic banking services from their mobile phones.<br />

Money transfers, deposits, and withdrawals are done through<br />

mobiles without the need for a bank account.<br />

Thanks to his captivating ways, Radjou seemingly connects<br />

many current contemporary business concepts, such as sharing<br />

and the circular economy, degrowth, and the maker movement,<br />

in a simple fashion. His editorial house adds: “With<br />

an estimated trillion-dollar global market for sustainable<br />

products, and with potentially huge cost savings to be gained,<br />

frugal innovation is revolutionizing business and reshaping<br />

management thinking.”<br />

Kevin Roberts, CEO at Saatchi & Saatchi, agrees. He offers<br />

a review of Radjou’s work by saying: “Jugaad innovation<br />

challenged the top-down Western approach to innovation<br />

by offering an agile, bottom-up model. Frugal innovation<br />

moves this forward, further and faster. The practical roadmap<br />

and numerous cases in this book find the beat of the new<br />

customer-led world order – where velocity, synergy, empathy,<br />

and involvement are standard. The future will be about doing<br />

more with less, and here we see how.”<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 55


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The SAVIOR<br />

OF SUNDANCE<br />

Robert Redford is one of Hollywood’s most celebrated actors and directors, but offscreen he<br />

has been waging a lifelong campaign to preserve the Earth’s natural resources and keep some of<br />

America’s most vulnerable places out of the hands of commercial developers and big business.<br />

Robert Redford is still a golden boy of Hollywood, an<br />

all-American star of the silver screen who, despite<br />

nearing the age of 80, retains the handsome features of<br />

his youth, and the passion and desire that have been central<br />

to his pursuits outside of the realm of acting.<br />

In 1978, Redford founded the Sundance Film Festival, which<br />

still exists today as one of the major highlights of the cinematic<br />

year. In 2001, he was rewarded for his efforts with an Academy<br />

Honorary Award and hailed by the entire industry as an “inspiration<br />

to independent and innovative filmmakers everywhere.”<br />

Offscreen, however, Redford has turned his attention and<br />

considerable gravitas to the pursuit of environmentalism. Not<br />

only is the celebrated thespian a devoted trustee of the Natural<br />

Resources Defense Council, but in 2012, he was also honored<br />

by Pitzer College through the Robert Redford Conservancy for<br />

Southern California Sustainability, which educates future generations<br />

of Californians with the aim of tackling some of the<br />

most complex and immediate threats to the world’s ecology.<br />

“I’m an individualist and a loner by nature, and I won’t preach,”<br />

explains the actor and director. “All I can do is help fight the<br />

negativism and the malaise that has crept over us; we don’t<br />

have to be sheep. I’ve tried to do my part to fight against a<br />

mass consumption society that is killing our environment,<br />

and I think that slowly some progress is being made. But in<br />

order to save the lakes and trees, society as a whole needs to<br />

believe that life is worth living and that the future is worth<br />

protecting.”<br />

Despite the fact that Redford can now look back on decades of<br />

work at the forefront of environmentalism, it was not always<br />

so. Nowadays, he is known for participating in a host of films<br />

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that document ecological struggles across America, including<br />

his appraisal of the dire situation regarding the Colorado River<br />

in his 2008 documentary Grand Canyon Adventure: River at Risk.<br />

But it was his time as a young man traveling in Europe that<br />

opened Redford’s eyes to the problems that society faced.<br />

“The time I spent in Paris was a decisive point in my life. It<br />

transformed me,” he says. “I was part of an incredibly stimulating<br />

crowd of artists and intellectuals who were all heavily<br />

interested in politics, whereas I was ignorant in that respect.<br />

They pushed me to think and develop my ideas, and that<br />

process was a major step in my evolution.”<br />

He continues by explaining, “I felt almost humiliated when I<br />

was living among these very committed French students and<br />

artists who would have these incredibly sophisticated debates<br />

about broad political issues in Europe. Being in Europe gave<br />

me a whole new perspective on life, and when I came back<br />

to the United States, I felt I was ready to make my mark – I<br />

wanted to learn more about the important issues in my country.”<br />

It was in his home state of California where Redford began<br />

to realize that things were not as sunny as they were made<br />

out to be. By the time the “political and cultural ferment of<br />

the 1960s came around,” Redford had decided to make social<br />

statements, both onscreen and off.<br />

“I was ready to think about the issues that were being raised,<br />

and I wanted to understand as much as I could and in my own<br />

way – with films like Downhill Racer and The Candidate – make<br />

some sort of statement,” Redford says. He adds that, “As an<br />

actor, you have to be careful – when I started getting involved<br />

in environmental issues, long before they were popular, I was<br />

getting attacked as some sort of tree-hugger.”<br />

It was not just Redford who was being dismissed at that time<br />

by the mainstream media – the power of big companies<br />

made it almost impossible to speak out against the rampant<br />

destruction of the environment.<br />

“The powers that be had too much power at that time, so they<br />

could drown you out,” he recalls. “Oil, gas, and coal companies<br />

had all the power because they had all the money and all of<br />

Congress behind them. You felt like you were just a voice in<br />

the wilderness. I thought: If you have passion and just keep<br />

at it, eventually things will start happening.”<br />

Although Redford admits that environmental issues are becoming<br />

more commonplace in discussions surrounding American<br />

society, he also stresses that the same issues are not a recent<br />

revelation.<br />

“I remember hosting a climate conference in Denver in 1985,<br />

where two scientists came and made presentations about global<br />

warming,” he recalls, before exclaiming, “They were already<br />

predicting that the icecaps were melting then!”<br />

The consequences of such ignorance about the need to protect<br />

nature – such as the decisions made during George W. Bush’s<br />

presidential tenure that led to events such as the Appalachian<br />

toxic coal slurry spill at the turn of the century – still have<br />

far-reaching negative effect on the fight for environmental<br />

protection today.<br />

“It was frightening that the Bush administration tried to destroy<br />

many of the government agencies that had been created to<br />

protect the environment,” says Redford, referencing the gutting<br />

of sections of the Clean Water and Clean Air acts, and the<br />

crippling of the Superfund Program, which was an attempt to<br />

clean up toxic waste in more than 48 states. “We still haven’t<br />

recovered from the damage that was done to federal institutions<br />

that were created to safeguard our water, air, and what<br />

oil, gas, and mining companies are doing to our land.”<br />

Redford’s own unique experiences of the damage caused by commercial<br />

natural-resource mining have fueled his own personal<br />

development of projects, such as the Grand Staircase-Escalante<br />

National Monument in Utah – a 1.7-million-acre expanse of<br />

land that Redford campaigned to keep out of the hands of<br />

the mining companies, from 1975 right up until President<br />

Clinton officially closed the area off to development in 1996.<br />

“I first started to worry when I went to work at the oil refinery<br />

where my father was working,” he explains. “I remember seeing<br />

the oil seeping into the sand dunes and making a chemical<br />

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“<br />

The time I spent in Paris was a<br />

decisive point in my life. It transformed<br />

me. It pushed me to think and develop<br />

my ideas, and that process was a major<br />

step in my evolution.<br />

”<br />

mess of the land. It kind of horrified me that we could be so<br />

dismissive of the damage we were doing to the soil and air.”<br />

The chance for Redford to showcase the fruits of his environmental<br />

labor came as the popularity of his independent film<br />

festival began to rise. The event was moved from Salt Lake City<br />

to the Sundance Resort, an area of land on the slopes of Mount<br />

Timpanogos in western Utah that Redford acquired in 1968.<br />

“I grew up in a grim urban setting, and being able to develop<br />

land out there was a form of liberation to me,” he says. “Utah<br />

was an ideal setting because it was very raw and beautiful – at<br />

Sundance, I’ve taken this acreage, which is now almost 6,000<br />

acres, so that only wildlife can exist inside.”<br />

Not even Redford’s beloved Utah, however, is untouched by<br />

commercial development.<br />

“If you drive out of Sundance,” he says, “the moment you<br />

leave the canyon, you see nothing but concrete, cement, and<br />

bulldozers – that’s the attitude that surrounds us.”<br />

The veteran thespian hopes that recent signs of positive change<br />

in the general public and mainstream media’s attitude toward<br />

environmentalism will only continue. One modern ally that<br />

Redford did not have back when he began his fight to protect<br />

America’s natural landscapes in the late 1960s was the internet,<br />

which he says is allowing “more information to reach people<br />

faster than ever before.”<br />

This, he envisions, will bring about a change in politics. And<br />

although he believes it has already begun to happen, he is as<br />

determined as ever to challenge the same dominant voices<br />

that threatened to drown him out decades ago.<br />

“I think they are genuinely worried, but the ones that are most<br />

threatened are going to raise their voices the loudest because<br />

they see their time is running out,” he declares. “They don’t<br />

want to go quietly into the night because of all that money that<br />

has been made in their industries – and since money really<br />

runs the show, I think they see a threat to their investments.”<br />

Having fought tooth and nail against the powers that be for<br />

decade after decade, Redford’s mission is just as important<br />

now as it was in the 1960s. However, the true cost of such<br />

development, he says, will not be known for many years to<br />

come, when future generations will be tasked with the attempt<br />

to rebuild the world, if they can.<br />

“Our planet is shrinking, and I worry about what’s going to<br />

be left if we don’t stop,” he sighs. “What we develop for our<br />

survival, and also what we preserve for our survival – if we<br />

don’t have equal preservation, there will be no planet left.<br />

After all, why would anybody want to bring children into the<br />

world if that’s the direction we are going in?”<br />

Written by Jake Taylor.<br />

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Real-life<br />

Eco-warrior<br />

She is known for playing passionate women who fight for their chosen cause, but in real<br />

life, Hollywood actress Sigourney Weaver is equally relentless in her work as a zoologist<br />

and conservationist. From saving the gorillas to protecting our oceans, the actress is<br />

devoted to bringing about real change.<br />

It is not unusual for actors to temporarily “become” the<br />

person whom they are portraying, but when Hollywood<br />

star Sigourney Weaver took on the role of murdered primatologist<br />

Dian Fossey, it launched the actress on a lifelong<br />

conservation mission that has continued long since the cameras<br />

stopped rolling. Twenty-eight years later, her environmental<br />

endeavors have gone beyond advocating for the protection<br />

of the mountain gorillas, though she still serves as Honorary<br />

Chairperson of the Diane Fossey Gorilla Fund <strong>International</strong>.<br />

She is now also committed to raising awareness about the<br />

threats faced by marine wildlife and empowering women in<br />

extreme poverty through the nonprofit organization Trickle Up.<br />

“After spending so much time with the mountain gorillas in<br />

Rwanda and playing Dian, I felt that I had been given a gift.<br />

It’s appropriate that I try to do whatever I can to help protect<br />

them,” explains Weaver, describing how her environmental<br />

crusade began. The 1988 drama tells the true story of Dian<br />

Fossey, a naturalist who worked in Rwanda with mountain<br />

gorillas. Prior to her work in the Virunga Mountains, Fossey<br />

had spent time in the Congo studying the primates. Having<br />

become frustrated at her inability to get close to them, she<br />

eventually used her experience of working as an occupational<br />

therapist with autistic children, discovering that when she<br />

mimicked the primates and became submissive, they would<br />

respond better to her. By the time she began her work in<br />

Rwanda in 1967 and founded the Karisoke Research Centre,<br />

Fossey was entirely devoted to protecting the animals and was<br />

horrified by the practice of poaching in the area, despite it<br />

being illegal. Over the next 18 years, Fossey would help arrest<br />

several poachers, who went on to serve lengthy jail sentences.<br />

She even founded her own poaching patrols, and in 1978<br />

tried to prevent two infant gorillas, Coco and Pucker, from<br />

being exported to a zoo in Cologne, Germany. Naturally, her<br />

incredible efforts caused tension among the local gangs and<br />

poachers, and in 1985 (aged 53) Fossey was found bludgeoned<br />

to death in her cabin on the outskirts of the camp.<br />

The story of Dian Fossey is so extraordinary that little embellishment<br />

was required. Even her relationship with National<br />

Geographic photographer Bob Campbell was based on fact.<br />

Weaver was dedicated to bringing to life the tale of the woman<br />

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who essentially saved these mountain gorillas from extinction<br />

at the cost of her own life, even if, at times, the actress<br />

admits she felt utterly out of her comfort zone. “The truth is,”<br />

she explains, “I didn’t really know how I would react to the<br />

gorillas. I had no experience with wild animals. But I knew<br />

that in order to play the part [of Dian Fossey], which I wanted<br />

very much to do, and in order to get Dian’s message out, there<br />

was no time for me to worry about what was going to happen.<br />

I remember I was pretty excited when we finally reached a<br />

place with gorillas.”<br />

The film seamlessly blended moments of actual gorillas in<br />

their live habitats with scenes of humans in costume. Even<br />

so, there were plenty of scenes where Weaver would interact<br />

with actual gorillas. Not only did this add authenticity to the<br />

film, it also helped Weaver understand Fossey’s own motives<br />

and commitment to helping them.<br />

“The first time you see the mountain gorillas, you feel so blessed;<br />

you feel like you’re in Eden. One of them, a little female named<br />

Josie, came right over and sat next to me. She kind of leaned<br />

on me and looked up at me. I was just captivated. I never<br />

looked back after that,” says Weaver wistfully. “I always felt<br />

that if I followed Dian’s basic rules of being submissive and<br />

quiet, not drawing attention to myself and being respectful,<br />

nothing would ever happen to me.”<br />

It is a bitter irony that the real Dian Fossey spent so much<br />

among these wild – and presumed dangerous – creatures,<br />

and yet met her death at the hands of humans. Weaver admits<br />

that the time spent among the gorillas not only galvanized her<br />

desire to protect them but also triggered her own maternal<br />

instincts, saying: “Playing Dian, I would usually have several<br />

little baby gorillas jumping up and down on me, pulling my<br />

hair, urinating on me, grabbing my bag…. And I had so much<br />

fun with them, and I loved them so much; I remember thinking,<br />

‘I would really like to be a mother!’ I got hooked on being<br />

a surrogate mother, roughing it in the hills of Rwanda, and I<br />

had my daughter pretty soon after that.”<br />

Over the past three decades, she has cemented her place among<br />

Hollywood’s elite and has garnered a reputation for playing<br />

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“<br />

The planet Earth has its own<br />

life force – the oceans. Our oceans<br />

generate most of our oxygen, regulate<br />

our climate, and provide most of our<br />

population with sustenance.<br />

strong and formidable females, especially in her most famous<br />

role as Ellen Ripley in the Alien franchise. However, it would<br />

be another film featuring extraterrestrials that would inspire<br />

Weaver to once again speak out on conservational matters,<br />

this time on behalf of our marine life. In CGI behemoth Avatar,<br />

she plays Dr. Grace Augustine, a scientist who has dedicated<br />

her life to analyzing the links between the alien Na’vi people<br />

and the peculiar environment on Pandora. Similarly, Weaver<br />

is determined to compel lawmakers to enact legislation to<br />

save our oceans.<br />

”<br />

“The planet Earth has its own life force – the oceans. Our<br />

oceans generate most of our oxygen, regulate our climate, and<br />

provide most of our population with sustenance,” explains<br />

Weaver, who narrated the 2010 documentary ACID TEST: The<br />

<strong>Global</strong> Challenge of Ocean Acidification as part of her work on<br />

behalf of the Natural Resources Defense Council.<br />

“Marine ecosystems are essential to all life on earth,” Weaver<br />

says. “Yet our oceans face a threat as dangerous as any Pandora<br />

faced: ocean acidification.” The film explores the startling<br />

phenomenon of the increasing acidity of our waters and the<br />

subsequent threat to marine life. Like global warming, ocean<br />

acidification stems from the increase of carbon dioxide levels<br />

in the Earth’s atmosphere since the start of the Industrial<br />

Revolution.<br />

Leading scientific experts on the problem – many of whom<br />

appear in the film – believe that it is possible to cut back<br />

on global warming pollution, improve the overall health<br />

and durability of our oceans, and prevent serious harm to<br />

our world, but only if action is taken quickly and decisively.<br />

Weaver insists that we simply cannot act fast enough. “One<br />

of the reasons that science fiction movies are becoming more<br />

and more popular is because we are actually in a world more<br />

and more like the worlds in science fiction. Our glaciers are<br />

melting and people are talking about colonizing Mars – so I<br />

think that not only will it become a very popular and beloved<br />

genre but also increasingly significant.”<br />

The problem with ocean acidification is that while, individually,<br />

we can all do our part to lower our own carbon footprints, for<br />

the most part it is the lawmakers and politicians who need<br />

to bring in legislation and devote money to monitoring and<br />

researching a problem that could prove devastating, not just<br />

for sea life but for our ecosystem in its entirety. By urging<br />

politicians to support America’s transition to a clean-energy<br />

economy, Weaver insists that America can increase its energy<br />

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efficiency and invest in renewable power while cutting carbon<br />

pollution. By passing strong clean-energy and climate legislation,<br />

Congress has the power to move society toward clean energy,<br />

tackle climate change, and protect our seas from acidification.<br />

“Small creatures in the ocean who are being affected by acidification<br />

are like the canaries in the mine. They’re singing,<br />

and we have to hear that and act,” insists the actor. “I, like a<br />

lot of concerned citizens, feel a kind of urgency about these<br />

climate questions. I don’t think I’ve ever felt more passionately<br />

about anything than this because I feel we’re already<br />

at a tipping point.”<br />

and aims to honor American women whose work has greatly<br />

advanced conservation, locally and globally. In Weaver’s acceptance<br />

speech, she credited her experience working with<br />

mountain gorillas in Rwanda for inspiring her environmental<br />

and conservation work, emphasizing that it taught her the<br />

importance of preserving animal habitats. She also credited<br />

her role in Avatar as a botanist who champions the natural<br />

world for intensifying her commitment toward protecting the<br />

Earth. But surely it is us who should be thanking Weaver for<br />

her admirable efforts in striving to protect something that is<br />

arguably invaluable to each and every one of us.<br />

In 2011 Weaver received the prestigious Rachel Carson Award<br />

from the National Audubon Society. The award was established<br />

in honor of Rachel Carson – a monumental figure in the 20th<br />

century and founder of the modern environmental movement –<br />

Plastic Ocean Waste<br />

$13 billion in damage every year to industries such as<br />

fishing, shipping, and tourism, UNEP reports. This is why<br />

initiatives like “The Ocean CleanUp”, founded by Dutch<br />

student Boyan Slat, or “Waste Free Oceans“ are developing<br />

feasible methods to rid the oceans of plastic. The goal is to<br />

extract, prevent, and intercept plastic pollution by initiating<br />

the largest cleanup in history. Many companies have shown<br />

an interest in using the harvested plastic. In an interview<br />

with The Guardian, Slat says: “Tens of companies – large<br />

corporations – have shown an interest in buying up the<br />

plastic and that is our holy grail; funding the cleanup using<br />

revenues created by the plastic we extract.”<br />

At least 5.25 trillion pieces of plastic are currently in the<br />

oceans, a third of which is concentrated in the infamous<br />

Great Pacific Garbage Patch, a maritime area larger than<br />

Texas. This plastic pollution inflicts grave environmental<br />

damage, such as killing at least one million seabirds<br />

each year. Additionally, plastic pollution creates at least<br />

Revenue with plastic waste? Yes, the brand Interface for<br />

example has the biggest and most diverse choice of carpet<br />

tiles made with 100 percent recycled yarn. Their goal for<br />

2020 is to only use recycled or bio-based materials, to cut<br />

the dependence on virgin petro-chemical raw materials.<br />

Its German competitor Desso now received a Cradle-to-<br />

Cradle-Gold certificate for using 100 percent recycled yarn.<br />

There are many other sectors who depend on plastic –<br />

decarbonization strategies have to take this in consideration<br />

and they have to bring more stakeholders on board. Hannah<br />

Gould writes in The Guardian: “Consumer goods companies<br />

keen to design for recycling don’t know which system to<br />

design for because municipal recycling is so diverse, while<br />

municipalities and waste companies are overwhelmed by a<br />

growing and changing portfolio of plastics.”<br />

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The<br />

Drowning Child<br />

Dilemma<br />

“Imagine you come across a<br />

small child who has fallen<br />

into a pond and is in danger<br />

of drowning. You know that<br />

you can easily and safely<br />

rescue him, but you are<br />

wearing an expensive pair of<br />

shoes that will be ruined if<br />

you do. We all think it would<br />

be seriously wrong to walk<br />

on past the pond, leaving<br />

the child to drown, because<br />

you don’t want to have to<br />

buy a new pair of shoes – in<br />

fact, most people think that<br />

would be monstrous. You<br />

can’t compare a child’s life<br />

with a pair of shoes!”*<br />

Peter Singer<br />

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So what will you do? Most of us do help in a concrete<br />

situation. Would it make any difference if the child is<br />

far away, in another country perhaps, but similarly in<br />

danger of death? Saving this child would come at no great<br />

cost and pose absolutely no danger to yourself. Most people<br />

do not help. The United Nations Children’s Fund (UNICEF)<br />

estimates that nearly six million children under the age of five<br />

die each year from causes related to poverty. That is 16,000<br />

a day. We human beings are emotionally and evolutionary<br />

conditioned to help people in front of us, where we have faceto-face<br />

communication. But we behave indifferent when the<br />

problem is far away.<br />

This world-famous thought experiment was invented by<br />

Peter Singer. The Australian philosopher is one of the most<br />

prominent representatives of the concept of utilitarianism.<br />

Balancing interests and equality, Singer says, does not mean<br />

equal treatment but equal consideration of interests. That is<br />

an aspect worth thinking about when you plan stakeholder<br />

dialogues.<br />

The drowning child dilemma is very prominent in the present<br />

discussion on migration and refugees: Do we help or do we<br />

behave indifferent to prevent more refugees from coming?<br />

In 1997 Singer wrote the following with an almost prophetic<br />

vision: “Our capacity to affect what is happening, anywhere<br />

in the world, is one way in which we are living in an era of<br />

global responsibility. But there is also another way that offers<br />

an even more dramatic contrast with the past. The atmosphere<br />

and the oceans seemed, until recently, to be elements of nature<br />

totally unaffected by the puny activities of human beings. Now<br />

we know that our use of chlorofluorocarbons has damaged<br />

the ozone shield; our emission of carbon dioxide is changing<br />

the climate of the entire planet in unpredictable ways and<br />

raising the level of the sea; and fishing fleets are scouring the<br />

oceans, depleting fish populations that once seemed limitless<br />

to a point from which they may never recover. In these<br />

ways the actions of consumers in Los Angeles can cause skin<br />

cancer among Australians, inundate the lands of peasants in<br />

Bangladesh, and force Thai villagers who could once earn a<br />

living by fishing to work in the factories of Bangkok. In these<br />

circumstances the need for a global ethic is inescapable.” *<br />

* Source: Peter Singer, “The Drowning Child and the Expanding Circle,”<br />

New <strong>International</strong>ist (April 1997).<br />

Are you an EA?<br />

EA means effective altruist. When you talk to an EA, you<br />

learn fast what distinguishes them from a classical altruist.<br />

Both care about others, society, and mankind, but the<br />

EA invests in a career to make a lot of money to finance<br />

as many social projects as possible. The problem with<br />

altruism, they say, is that people are not rational. They help<br />

with their hearts, not their heads. A recent study investigated<br />

how much money people would give to save birds.<br />

The result: It does not matter if you save 200,000 birds or<br />

20,000 birds because the amount of money stays the same.<br />

For EAs, this kind of behavior is inefficient because it does<br />

not have enough “impact” – a crucial buzzword for them.<br />

That is why platforms such as GiveWell spend a lot of time<br />

and statistics on cost-benefit calculations. EAs want to<br />

have the maximum impact for each cent they spend. Where<br />

the money comes from is less important. It is not surprising<br />

that many EAs work in the financial sector, where they<br />

make lots of money to spend altruistically. But is it ethically<br />

correct to work for companies that are not sustainable?<br />

EAs say yes, because it is better that an ethically conscious<br />

person – an EA, for instance – does this kind of job than<br />

someone who does not care about philanthropy. This has<br />

no impact. From the CSR point of view, this argument is<br />

critical. For example, Thomas Beschorner, a professor in<br />

Switzerland, says that it does not matter how you spend<br />

your money – it matters how you earn it.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 65


the<br />

wAter ADVoCAte<br />

Water is her absolute number one priority.<br />

Mina guli, an australian businesswoman<br />

and environmental activist, is committed<br />

to the idea that water is the foundation of<br />

our society and that, without water, we do<br />

not have a future. She felt that she had to<br />

do something big to capture the world’s<br />

attention. So beginning in <strong>2016</strong>, Guli tied<br />

her shoes for the “7 Deserts run.” then she<br />

started running: 40 mara-thons, 7 deserts,<br />

7 continents – in just 7 weeks. It was an ultramarathon<br />

that had never been done before.<br />

all for one reason – water.<br />

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Your athletic career is meant to raise awareness about issues important<br />

to you, right?<br />

I want to demonstrate to the next generation the enormity<br />

of the problem concerning the water supply. The problem<br />

is that water is so far removed from our reality. We turn the<br />

tap on, water comes out, and we don’t have any idea that<br />

that’s actually not going to be permanent. Second, we don’t<br />

understand how all these consumption patterns are linked<br />

to the water crisis.<br />

What you’re doing is grabbing people’s attention and inspiring them<br />

to change?<br />

That’s what I hope. I want people to ask, “Why is this woman<br />

doing this really crazy thing? Oh she’s doing it for water. Well,<br />

why water?” And then for people to ask, “Oh, did you know<br />

that that cup of tea used more than 30 liters of water to make?”<br />

“Did you know that those leather shoes took 16,000 liters of<br />

water?” “Did you know that eating a hamburger is the same<br />

as taking a shower for two hours?”<br />

How do we begin to turn the water crisis around?<br />

The World Economics Association has raised the water issue as<br />

being the number one risk facing society – so large a risk that<br />

by 2030 there will be a 40 percent difference in the demand<br />

for water and the supply available. That’s why I’m running so<br />

many marathons – to illustrate this point. If we can create a<br />

consumer movement comprised of people who understand and<br />

value water, and if we can create an incentive for companies<br />

to change the way they utilize water in their supply chain, we<br />

can avert the future that is currently set out for us.<br />

which means that they can’t afford to pay the banks. People<br />

need to leave their places of residence, the towns become<br />

ghost towns, and the fabric of that society starts falling apart.<br />

Can you talk about your work attempting to lower greenhouse emissions,<br />

especially in China?<br />

Before I got involved in the water issue, I spent about 15<br />

years involved in climate change: first in Australia at the<br />

Sydney Futures Exchange, where I developed some of the<br />

first contracts to reduce greenhouse gas emissions; and then<br />

at the World Bank in Washington, DC. I realized very quickly<br />

that if we really wanted to make an impact on the planet, it<br />

wasn’t going to be good enough to just switch one light off<br />

in Australia. We had to change the way the lights were being<br />

manufactured in places such as China. So we built Peony<br />

Capital and invested in a bunch of projects across China that<br />

reduced greenhouse gas emissions and attempted to change<br />

China from being a high-carbon economy to a low-carbon<br />

economy. It was through my work in climate change that I<br />

became known as a leader in that field and was nominated<br />

by the World Economic Forum to join their Young <strong>Global</strong><br />

Leaders community. It was through that community that<br />

I became exposed to the water issue and realized that, although<br />

climate change was an important issue, water was an urgent<br />

issue that required attention now. I also realized that although<br />

there were many people involved in climate change and in<br />

solving that, the water movement needed more exposure. To<br />

get it onto the front pages of the newspapers, we all need to<br />

understand this concept of invisible water. We need to make<br />

invisible water visible.<br />

How will it affect our daily lives in the future?<br />

Every single thing you see right now took water to make –<br />

your house, walls, the lights, the computer you’re probably<br />

using. All of those things took water. If you fast forward to<br />

an environment in which we have very little water or where<br />

water is too expensive to use, all those things will either not<br />

be available or be available and much more expensive because<br />

the input of water is much more expensive than it is now.<br />

We’re so dependent on it that it could have profound effects on our<br />

civilization.<br />

Absolutely right. Water is the foundation of our entire economy<br />

and our lives, and without water there’s a huge ripple effect.<br />

Look at villages or towns in different parts of the world where<br />

they’ve had such major water crises that they’ve been unable to<br />

continue to survive on the crops that they traditionally planted<br />

and harvested. Their income over a period of time dwindles so<br />

much that they can no longer afford to repay their mortgages,<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 67


The Taste<br />

Tester<br />

Kevin McCloud, MBE, is a<br />

British designer and television<br />

presenter best known for his<br />

work on Grand Designs, which<br />

is one of the longest-running<br />

Channel 4 shows. McCloud<br />

is actively campaigning to<br />

promote One Planet Living, the<br />

WWF’s sustainability initiative.<br />

We talked with him about<br />

sustainability in building and<br />

furnishing houses. McCloud’s<br />

message is clear: We have to<br />

make sustainable products<br />

irresistible.<br />

Sustainable housing is a big focus at Grand Designs and you’re<br />

a vocal advocate for sustainability. What impact do you think<br />

design has on sustainability, and in what ways?<br />

The relationship between making things and sustainability<br />

is so essential. As a society, we’ve lost touch in the West with<br />

the value of made things, with the value of raw materials, of<br />

the energy required. I don’t just mean fossil fuel energy but<br />

also the human energy that goes into making things. I’m very<br />

struck by the fact that we’ve got people making lighting out<br />

of bits of recycled industrial stuff, or that people are selling<br />

furniture that they’ve handcrafted in small workshops all<br />

over the country.<br />

What goes in is normally a raw material, something dug out<br />

of the ground, rough and unprocessed, and what comes out<br />

is such beauty. A tree in one end, a table comes out the other;<br />

a lump of unrefined iron goes in one end, and a beautifully<br />

wrought table or door handle comes out the other end. That<br />

is what sustainable design and construction is: the reconnection<br />

of all of us to the value of things. I think we’ve lost that,<br />

we’re not a making society anymore.<br />

When we come to build houses, for example, it’s about getting<br />

people to understand the value of the made object, the<br />

value of the made building, to run it in such a way so that<br />

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it’s efficient, minimizing energy loss. That to me is actually<br />

what a lot of sustainability is about. People talk a lot about<br />

carbon, they talk about energy consumption and sustainable<br />

codes and building rigs, energy in use – all that stuff. It’s all<br />

technical, but actually, if you want people to save energy, if<br />

you want people to drive electric cars, to walk more, to cycle<br />

more, to share more, to buy less and consume less rubbish,<br />

to recycle more, then you’ve got to make them value what<br />

we have. It’s that simple.<br />

The UN has said that 7 out of 10 people will live in cities across the<br />

globe in the future. Are concepts such as your HAB project in the UK<br />

transferable to the wider world, to places with fewer amenities, fewer<br />

facilities, less electric?<br />

The HAB project is very contextual – it’s designed for the UK,<br />

designed for where they are. I’m more interested, actually, in<br />

learning about how other people live in other cultures with<br />

much lower impact and bringing that here. I spent some time<br />

in India, in very high-density places, and studied there how<br />

people share resources and public spaces, even the notion of<br />

personal space. How people get by with the minimum of stuff<br />

is really, really humbling. Of course, they’re happy – that’s<br />

the other thing. Those communities that we may think of as<br />

being more primitive – slums – actually hold the key to a<br />

lot of positives in terms of human interaction.<br />

The younger generation is being told a lot more about being eco-friendly.<br />

When younger couples are building houses, do you think they go for<br />

more sustainable materials, or do you think they still gravitate toward<br />

a more timeless, traditional style?<br />

All of us are attracted by the bling. We love the idea of the new<br />

and the fresh, the exciting and the sparkly. I know plenty of<br />

18-year-old kids who just want to own a Porsche and live in<br />

a glamorous flat on the Thames. We’re all vulnerable to the<br />

same yearnings and deceptions, and the trick, of course, is to<br />

make the sustainable desirable – actually more desirable. I<br />

drive an electric car, and there are electric cars out there that<br />

are more exciting, more beautiful, and more sustainable than<br />

their petrol equivalents.<br />

When we build our houses, what we want to do is provide more<br />

light, higher ceilings, skylights, extra storage. We try and basically<br />

produce better architecture that also happens to be sustainable.<br />

The trick is to make it irresistible. That’s the way to do it, not<br />

by saying, “Oh look, don’t buy Versace, buy this hair shirt, it’s<br />

far more ecological.” No, the answer is to make the big surprise<br />

that the product is really well-made, that it lasts, that we don’t<br />

succumb to the changing whims of fashion but we go for style,<br />

more timeless values, beauty. We need the bigger manufacturers,<br />

be they carmakers or fashion houses. We need them to use<br />

sustainable, organic materials, and use them ethically.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 69


GOOD PRACTICE SECTION 1: INEQUALITIES | EDUCATION | PARTNERSHIP<br />

The size of the SDG icons reflects the quantity of appearance in this section.<br />

HUMAN RIGHTS<br />

LABOUR STANDARDS<br />

ENVIRONMENT<br />

ANTI-CORRUPTION<br />

SUSTAINABLE<br />

DEVELOPMENT<br />

G O A L S<br />

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GOOD PRACTICE<br />

IneqUAlITIeS | eDUCATIon | PARTneRSHIP<br />

72<br />

74<br />

76<br />

78<br />

82<br />

84<br />

86<br />

88<br />

90<br />

94<br />

96<br />

Adecco<br />

Banca Popolare di Sondrio<br />

Bosch<br />

Deutsche Post DHl Group<br />

Deutsche Telekom<br />

Green Delta Insurance<br />

Manila Doctors Hospital<br />

Merck<br />

Philip Morris <strong>International</strong><br />

Sakhalin energy<br />

Sanofi<br />

woRK | InnoVATIon | ClIMATe<br />

102<br />

104<br />

106<br />

108<br />

110<br />

112<br />

114<br />

116<br />

118<br />

120<br />

122<br />

126<br />

128<br />

130<br />

132<br />

134<br />

136<br />

138<br />

Acciona<br />

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

Armacell<br />

Audi<br />

BASf<br />

Bayer<br />

Commerzbank<br />

Consolidated Contractors Company<br />

eDf Group<br />

HoCHTIef<br />

MAn<br />

mcs<br />

MTU Aero engines<br />

nestlé<br />

Postnl<br />

RoMRADIAToARe<br />

SkyPower<br />

Vaisala<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 71


Aspire to Be<br />

‘CEO for One Month’<br />

Accessing the world of work and finding a pathway to fulfill their personal potential is a major<br />

challenge for anyone out of – and seeking – work. This is especially so for the 73 million youths<br />

under the age of 25, fueling fears of a ‘jobless generation.’ Skills mismatch and a lack of experience,<br />

even among the most highly educated, can almost be perceived as a discriminatory<br />

barrier to employment, which is central to <strong>Global</strong> <strong>Compact</strong> Principle 6. It dashes dreams,<br />

wastes human capital, and damages productivity. The Adecco Group – the world’s leading<br />

provider of HR solutions – has not stood by idly.<br />

By Lilian Furrer, Adecco Group<br />

The 10 finalists of ‘CEO for One Month’<br />

2015 from Europe, Asia, and Oceania,<br />

who all showed exceptional flair for<br />

business, creativity, and entrepreneurship.<br />

‘CEO for One Month.’ From that group of<br />

34 – equipped with their local experiences<br />

as CEO – 10 were shortlisted to run<br />

for Adecco Group’s <strong>Global</strong> CEO position.<br />

Those 10 participated in a final selection<br />

‘boot camp,’ with the successful candidate<br />

working alongside the Adecco Group CEO,<br />

Alain Dehaze, for one month.<br />

In the last three years, more than 2.2<br />

million people have accessed a range of<br />

Adecco Way to Work initiatives. They are<br />

designed to provide practical support and<br />

work experience opportunities for young<br />

people – of various ages and abilities –<br />

to help them make breakthroughs and<br />

fulfill their potential. These include “Street<br />

Days,” in which Adecco employees offer<br />

practical job hunting and career advice in<br />

cities worldwide; internship opportunities;<br />

an online career center; and an innovative<br />

scheme called ‘CEO for One Month’ – an<br />

initiative first launched by Adecco Norway<br />

in 2011 and piloted by the Group in<br />

2014. An astonishing 18,000 applied for<br />

the ‘CEO for One Month’ opportunity in<br />

2015, starting with an online application.<br />

In 34 countries, candidates went through<br />

thorough selection processes, with the<br />

very best applicant in each country being<br />

offered the chance to become an Adecco<br />

‘CEO for One Month’ and Adecco Way<br />

to Work are practical expressions of<br />

Adecco’s corporate social responsibility,<br />

over and above the company’s day-to-day<br />

business of helping people find work and<br />

companies access the talent they need.<br />

Alain Dehaze, CEO of the Adecco Group,<br />

states: “Our future depends on the skills,<br />

confidence, and experience of today’s<br />

young people. It’s a shared responsibility<br />

to help them build their careers through<br />

training, guidance, and opportunities.<br />

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she rose to in her month. “I was struck<br />

by how even a global organization like<br />

the Adecco Group is open to new ideas<br />

from people outside the organization<br />

with relatively little experience.”<br />

‘CEO for One Month’ Ayumi Kunori<br />

and Alain Dehaze on stage at the<br />

VBO FORUM – Young Talent in Action<br />

This is what ‘CEO for One Month’ is all<br />

about. It raises aspirations and allows<br />

youngsters to challenge themselves, gain<br />

hands-on experience alongside Adecco<br />

Group’s top management, and get a taste<br />

of how to run a global company.”<br />

Shadowing the top management provides<br />

the young ‘CEOs’ with unique insight into<br />

the real-life challenges and responsibilities<br />

such a position brings. It is about<br />

much more than learning about the nuts<br />

and bolts of sales meetings and finance:<br />

they deep-dive into HR and leadership<br />

issues, as well as industry trends and CSR.<br />

As part of Adecco Group’s overall efforts<br />

to help people of all abilities and educational<br />

backgrounds fulfill their potentials,<br />

the ‘CEO for One Month’ initiative<br />

focuses upon helping build responsible<br />

and successful leaders for the future.<br />

Transformational opportunities<br />

It has been a unique experience for participants,<br />

especially for the 2015 <strong>Global</strong><br />

‘CEO,’ Ayumi Kunori, an undergraduate<br />

from Ritsumeikan University in Kyoto,<br />

Japan: “Looking at the journey I made,<br />

I think I came very far, learning many<br />

new things. It was a turning point in my<br />

life, helping me set my goals higher, to<br />

become a CEO one day. I think a good<br />

CEO needs to be passionate about work,<br />

but you also have to be humble and recognize<br />

the colleagues who support you.”<br />

She traveled with Adecco Group’s global<br />

CEO around Europe, Asia, and the United<br />

States. Her toughest and yet most rewarding<br />

challenge was addressing 1,000 young<br />

people at a career conference in Belgium<br />

about her experiences. Her message to<br />

them and to all young aspiring people:<br />

“If you dream big, you can do it.” While<br />

completing her studies, Ayumi took up a<br />

part-time position at Adecco Japan.<br />

Ernesto Lamaina, Adecco Italy’s ‘CEO for<br />

One Month’ and one of the boot camp<br />

finalists, did not regret leaving an internship<br />

in Slovakia to experience the ‘CEO’<br />

role. “It’s been life-changing. It’s like an<br />

MBA but in real life. One thing I learned<br />

is that as a CEO, it’s important you listen<br />

to everyone’s input, even if they are the<br />

most junior member of a team.”<br />

The Romanian ‘CEO for One Month,’<br />

Alexandra Tirziu, studied languages, PR,<br />

and HR. She found the ‘CEO’ experience<br />

enriching, even attending the World Economic<br />

Forum at Davos, where the Adecco<br />

Group presented its <strong>Global</strong> Talent Competitiveness<br />

Index to business leaders. At<br />

that event, she was tasked with writing<br />

an article for the Wall Street business daily<br />

in Romania, one of the many challenges<br />

The ‘CEO for One Month’ initiative has<br />

proven to be an enabler for youngsters’<br />

employability and job opportunities. Paola<br />

Ospina from Colombia, Adecco Group<br />

‘CEO for One Month’ 2014, progressed to a<br />

career in marketing at Adecco headquarters<br />

in the United States. Ayumi Kunori<br />

works part-time for Adecco in Japan while<br />

completing her studies, and Ernesto Lamaina<br />

was hired at Adecco headquarters<br />

in Switzerland. In <strong>2016</strong>, the ‘CEO for One<br />

Month’ initiative has sparked even more<br />

interest: by April 15, more than 53,400<br />

ambitious candidates from 50 countries<br />

had applied to take on the challenge.<br />

Work-based training:<br />

A win-win situation for youngsters<br />

and companies<br />

The ‘CEO for One Month’ initiative is<br />

now firmly embedded in the Adecco<br />

Way to Work initiative. The company<br />

is always looking for new and innovative<br />

ways to help young people succeed in the<br />

working world in ways that reflect their<br />

needs and experiences. For example, in<br />

June 2015, the Adecco Group joined the<br />

European Alliance for Apprenticeships,<br />

pledging to offer 5,000 apprenticeships<br />

in Europe by the end of 2017. “Joining<br />

the European Alliance for Apprenticeships<br />

represents a further confirmation<br />

of Adecco Group’s commitment to tackle<br />

youth unemployment,” says Mark De<br />

Smedt, former Chief HR Officer. “In 2015,<br />

within the Adecco Way to Work programme,<br />

Adecco has already placed over<br />

3,000 youngsters in internships and<br />

work-based training opportunities. With<br />

this pledge, we go a step further and<br />

commit on apprenticeships. We strongly<br />

believe that concrete solutions to boost<br />

economic development and employment<br />

are only possible through public-private<br />

partnerships and initiatives such as the<br />

European Alliance for Apprenticeships.<br />

Together we can make a difference.”<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 73


Financial Education and<br />

Beyond: Investing in the<br />

New Generations<br />

for a Better Future<br />

The cultural development activities of Banca Popolare di Sondrio<br />

have always focused on the needs of its home territory, where<br />

the bank has its “head, heart, and roots.” The objective has been<br />

to promote and highlight the many cultural and social aspects<br />

of the area, as well as its natural beauty and the resources that<br />

inspire human creativity.<br />

By Mara Simonini, Banca Popolare di Sondrio<br />

Among cultural activities proposed by<br />

the bank, special and ongoing attention<br />

is dedicated to young people who – with<br />

their minds on the future and their enthusiastic<br />

projects – will be tomorrow’s<br />

workers and consumers and will have a<br />

considerable influence on the economy<br />

and society as a whole.<br />

Many of the numerous initiatives organized<br />

by the bank over the past year have<br />

been dedicated to them, especially those<br />

that emphasize the need for a sustainable<br />

economy and the sensible use of money<br />

and its careful management.<br />

In the spring of 2015, Banca Popolare<br />

di Sondrio worked together with other<br />

partners to promote “EconomiaAscuola<br />

– A lezione di cittadinanza economica”<br />

(economic citizenship in the school),<br />

an event organized by the Fondazione<br />

per l’Educazione Finanziaria e il Risparmio<br />

(Foundation for Financial Education and<br />

Savings) that was dedicated to more than<br />

400 students in the province of Sondrio<br />

and their teachers. The day, divided between<br />

information and fun, covered<br />

many aspects:<br />

• the sensible use of money (ordinary and<br />

extraordinary expenses, the difference<br />

between necessary and superfluous<br />

spending, the importance of savings);<br />

• how to become sustainable citizens<br />

(adopting a responsible approach to<br />

oneself, to others, and to the surrounding<br />

environment);<br />

• the value of money (work, income, and<br />

human capital within the economic<br />

cycle of a family);<br />

• what lifestyle and consumption patterns<br />

to adopt (the role of individual<br />

and collective responsibility, legality in<br />

the economy, what the newspapers say<br />

versus what happens in everyday life).<br />

This special day sought to make an indelible<br />

impression on the young participants<br />

and, hopefully, orient their future<br />

attitudes and decisions.<br />

“Invito a Palazzo” (Invitation to the Palace),<br />

an event held under the patronage of the<br />

Italian Banking Association, took place<br />

in October 2015. This was an occasion<br />

for Banca Popolare di Sondrio to open a<br />

number of prestigious buildings to the<br />

public, including the branch at Passo<br />

Stelvio and the adjoining Carlo Donegani<br />

Museum. The museum collection includes<br />

various precious items, placed side by<br />

side, that were left behind by the Italian<br />

and Austrian soldiers who died in the<br />

local mountains during World War II,<br />

demonstrating the futility of war and representing<br />

an invitation for peace and the<br />

exchange of culture, ideas, and knowledge.<br />

Moreover, in the Stelvio National Park,<br />

at 2,600 meters, the bank organizes an<br />

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Each year, the bank marks “World Savings<br />

Day” with initiatives for the general<br />

public, but especially for young people<br />

and students. Banca Popolare di Sondrio<br />

considers it both useful and a necessary<br />

duty to remind people about “saving”<br />

and encourage them to think about<br />

what it means. Last year, this day was<br />

honored by the authoritative presence in<br />

Sondrio of Professor Francesco Sabatini,<br />

a high-profile personality, famed linguist,<br />

philologist, lexicologist, and honorary<br />

chairman of Accademia della Crusca.<br />

annual Mass to celebrate “the Madonna<br />

of the Snow, Queen of Peace, Custodian of<br />

Creation,” during which the congregation<br />

is invited to reflect in an intimate and<br />

spiritual way – assisted by the stark beauty<br />

of the alpine surroundings – about the<br />

tragedy of the Great War and about peace<br />

in a world still torn by strife.<br />

Driven by its cooperative and socialcultural<br />

spirit, Banca Popolare di Sondrio<br />

opened the “Luigi Credaro” Library in<br />

October 2007 in the presence of the Minister<br />

of Education at the time, Giuseppe<br />

Fioroni. This library is dedicated to an illustrious<br />

local educationalist, parliamentarian,<br />

and senator (1860–1939), who<br />

also served as the Minister of Education.<br />

The “Luigi Credaro” Library is justified<br />

by the need and desire of the bank to<br />

make its massive and precious collection<br />

of documents and books more widely<br />

available. This wealth partly derives<br />

from a number of generous donations<br />

made by customers and shareholders and,<br />

more particularly, from major bequests<br />

of funds, archives, and personal libraries<br />

of important economists, sociologists,<br />

and academics.<br />

Given the unique nature of the assets held<br />

and the items collected, this is a specialist<br />

library of general social importance<br />

whose duties include the conservation of<br />

our heritage. More specifically, the library<br />

makes vast knowledge available to users,<br />

with most of the books being dedicated<br />

to economic, financial, and legal matters,<br />

while also offering a public reading<br />

service, inter-library loans arranged<br />

together with prestigious universities,<br />

and a document delivery service.<br />

The rooms housing the “Luigi Credaro”<br />

Library also provide a cultural space<br />

that integrates – rather than competes<br />

– with other libraries in the city and the<br />

province, seeking to broaden opportunities<br />

and boundaries through the targeted<br />

use of new IT and digital technologies:<br />

numerous university and other students<br />

visit the library every day for individual<br />

or collective study purposes.<br />

In some sense, savings and culture go<br />

hand in hand. Summarizing with regard<br />

to savings, they certainly involve sacrifice<br />

but also generate benefits for the<br />

individual saver and the community as a<br />

whole. The same is true for culture, which<br />

is acquired by study, commitment, and<br />

hard work that involve costs and going<br />

without: the benefits can be found, however,<br />

in the future personal and working<br />

life of the individual. Invited by Banca<br />

Popolare di Sondrio, Professor Sabatini<br />

first talked to students and teachers on<br />

the subject of “Italian is the key to our<br />

brain” and then held a conference entitled<br />

“The Italian language is not a telephone<br />

wire. The mother tongue and the others”,<br />

which was well attended by the public.<br />

The intensive cultural activities of Banca<br />

Popolare di Sondrio also include two<br />

special directions that have been followed<br />

successfully over the years: the<br />

preparation of cultural, historical, and<br />

naturalistic publications that are gifted to<br />

shareholders at the annual general meeting;<br />

and the holding of public conferences<br />

and conventions that have featured<br />

more than 100 speakers over the past 40<br />

years, including some of the most authoritative<br />

exponents from the worlds of<br />

politics, economics, culture, journalism,<br />

sports, and the performing arts.<br />

Banca Popolare di Sondrio likes to consider<br />

itself a bank that plays an important<br />

role as an intermediary, not so much<br />

in favor of its own territory’s culture,<br />

but more in terms of the circulation of<br />

culture within the territory.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 75


Promoting integration<br />

At Bosch, a sustainable approach to doing business is an established part of corporate strategy.<br />

Since the company was founded, its activities have reflected the wishes of its founder, Robert<br />

Bosch, who was committed to contributing to social well-being and strongly believed in the<br />

principle of ethical business. That sense of social responsibility is still reflected in the actions of<br />

Bosch associates today, for instance when it comes to the integration of refugees.<br />

By Bernhard Schwager, Bosch<br />

The number of refugees seeking safety<br />

and a better future in Europe remains<br />

high, and this poses a major challenge for<br />

EU member states. Since 2015, Germany<br />

has also faced a particular challenge:<br />

Well over a million people have sought<br />

asylum in the country since the start<br />

of last year. This situation has been the<br />

subject of heated debate and has brought<br />

forth a number of questions. Nevertheless,<br />

most politicians, business people,<br />

and members of the general public agree<br />

that all stakeholders must cooperate<br />

with one another to keep the situation<br />

under control. Here, the business world<br />

can make an important contribution.<br />

Especially when it comes to the integration<br />

of refugees, companies can provide<br />

support in a number of ways.<br />

Donations for local aid organizations<br />

Against this backdrop, in 2015 targeted<br />

aid initiatives were organized in a number<br />

of Bosch countries. For instance,<br />

Primavera e.V., the nonprofit organization<br />

operated by Bosch associates, made<br />

a call for donations across Europe. With<br />

the help of the Bosch board of management,<br />

the group works council and the<br />

group committee of executive representatives<br />

asked all associates to support<br />

the refugee cause. In the end, more<br />

than € 400,000 was collected in several<br />

Bosch countries. As it had previously announced,<br />

Bosch then doubled the total<br />

to € 820,000. The money went toward<br />

a number of sustainable local projects<br />

that aimed to help refugees. Moreover,<br />

associates were invited to make suggestions<br />

for projects that the funds could<br />

support. The idea behind this was that<br />

local people would have the best knowledge<br />

about which social activities were<br />

important in their locations. Eligible<br />

projects included charitable initiatives<br />

that had already received the support of<br />

current or former Bosch associates. Ideally,<br />

these initiatives would be situated<br />

close to a Bosch location. A committee<br />

that included members of Primavera,<br />

the group works council, and Bosch<br />

associates decided on how the money<br />

would be distributed. Until now, Bosch<br />

has provided targeted support to more<br />

than 100 projects.<br />

Associates as mentors<br />

In addition to this, Bosch is committed<br />

to helping refugees get off to a good<br />

start in Germany. Prior to the call for<br />

donations, the company had already<br />

made € 500,000 available for integration-related<br />

activities at its locations.<br />

Moreover, the company has offered cities<br />

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and municipalities properties on which<br />

emergency shelters can be built, as well<br />

as vacant apartments.<br />

“<br />

The integration of refugees is an extremely<br />

important social responsibility. For this reason,<br />

we at Bosch also want to make an active<br />

contribution to supporting integration.<br />

We have a long tradition of combining<br />

economic activity with social responsibility.<br />

Together with our committed associates, we<br />

want to help people gain a foothold in our<br />

society and offer them a better future. ”<br />

Dr. Volkmar Denner, Chairman of the Board of Management, Robert Bosch GmbH<br />

Bosch also plans to create 400 additional<br />

internship spots that will either prepare<br />

refugees for an apprenticeship or for<br />

entry into the German labor market. At<br />

the same time, mentorships with Bosch<br />

associates and language lessons aim to<br />

help make interns capable of navigating<br />

their new surroundings as quickly<br />

as possible. The company is working<br />

closely with public institutions to expand<br />

existing qualification programs in<br />

a way that makes sense. This is also the<br />

aim of Bosch Jugendhilfe (Bosch Youth<br />

Aid), which sees Bosch associates act as<br />

mentors for refugee children with the<br />

“KinderHelden” (Child Heros) initiative.<br />

These mentors help children and youth<br />

get off to a good start in school and are<br />

available to support their mentees on<br />

school-related issues.<br />

A network of companies<br />

Bosch is also a member of the nationwide<br />

network of companies called “Wir<br />

zusammen” (Together). This platform<br />

pools the projects of more than 60 large<br />

and mid-sized companies and inspires<br />

others to get involved with refugees<br />

as well. Just as it has done with many<br />

initiatives at more than 20 locations in<br />

Germany, Bosch is sponsoring a project<br />

in Immenstadt. The initiative supports<br />

24 unaccompanied minors. Among other<br />

things, these young people complete a<br />

six-week internship at Bosch in cooperation<br />

with the local vocational school. The<br />

first round of internships has already<br />

been successfully completed, in no small<br />

part thanks to the participants’ high levels<br />

of motivation. This project reflects the<br />

importance of local activities, as it shows<br />

what can be achieved when apprentices,<br />

site management, and many other associates<br />

cooperate with one another.<br />

Cultural exchange<br />

Ultimately, refugee aid initiatives in<br />

Europe depend on the commitments of<br />

thousands of volunteers. At Bosch, too,<br />

many associates are helping promote the<br />

success of integration. For instance, an<br />

initiative of apprentices in Germany aims<br />

to encourage intercultural exchanges<br />

between people of different nationalities.<br />

To this end, the participants meet<br />

with refugees on a regular basis, for<br />

instance to cook together or go to local<br />

events. At other Bosch locations, associates<br />

regularly call for donations to<br />

provide newly arrived refugees with<br />

the things they need for everyday life.<br />

Other initiatives make language and<br />

math lessons possible.<br />

Conclusion<br />

Although none of these activities offer<br />

a complete solution for the successful<br />

integration of refugees in Europe, the<br />

commitments of companies such as<br />

Bosch and their associates illustrate<br />

possible approaches to tackling this<br />

historic challenge. The aim is to come<br />

up with individual solutions, discover<br />

what we have in common with people<br />

from other cultures, and find out<br />

about differences that can be assets to<br />

our society. And everyone can make a<br />

contribution. Every bit of help counts,<br />

no matter how small.<br />

The Bosch Group<br />

The Bosch Group is a leading global supplier of technology and services. It<br />

employs roughly 375,000 associates worldwide (as of December 31, 2015). Its<br />

operations are divided into four business sectors: Mobility Solutions, Industrial<br />

Technology, Consumer Goods, and Energy and Building Technology. The Bosch<br />

Group comprises Robert Bosch GmbH and its roughly 440 subsidiaries and<br />

regional companies in some 60 countries.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 77


Compassionate Action:<br />

Deutsche Post DHL Group<br />

Refugee Aid Project<br />

As a company conducting business throughout Germany and around the world, we take our<br />

responsibility to society and our communities seriously at Deutsche Post DHL Group, including<br />

through our adherence to the <strong>Global</strong> <strong>Compact</strong> Principles. This is why, in the midst of the recent<br />

refugee crisis confronting Europe and Germany, we took the initiative to work together with<br />

established partner organizations to help facilitate the integration of refugees in Germany.<br />

By Deutsche Post DHL Group<br />

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Our refugee aid initiative is consistent<br />

with both our corporate and CR strategies<br />

and is a logical extension of our ongoing<br />

engagement in the area of corporate citizenship.<br />

By seeking to make a positive<br />

contribution to society, this also serves to<br />

strengthen our employees’ sense of mission<br />

and engagement, as we encourage<br />

and motivate them to support refugees<br />

in their areas. And, since we employ<br />

people in Germany from some 150 different<br />

countries, providing refugee aid<br />

is a natural reflex.<br />

Our aim is to provide steady and lasting<br />

support in the process of refugee<br />

integration. This requires careful coordination<br />

with partner and other relief<br />

organizations and public authorities.<br />

As this project gains momentum, we<br />

will further intensify this collaboration.<br />

Three pillars<br />

Our refugee aid initiative rests on three<br />

key pillars: strengthening social engagement<br />

among our employees; providing<br />

vocational orientation for refugees; and<br />

supporting federal, state, and local authorities.<br />

TIME TO ACT – DEUTSCHE POST DHL GROUP<br />

REFUGEE AID<br />

1 “Time to act” – Deutsche Post DHL Group refugee aid<br />

TIME TO ACT – DEUTSCHE POST DHL GROUP<br />

REFUGEE AID<br />

We<br />

want<br />

to …<br />

… strengthen social<br />

engagement among<br />

our employees<br />

… provide vocational<br />

orientation for<br />

refugees<br />

by We … want … motivating … strengthen employees social … offering … provide them vocational<br />

to…<br />

engagement among orientation for<br />

in our branch our employees offices internships refugees with<br />

to support refugees the prospect<br />

in their areas.<br />

of training and<br />

We cooperate with employment.<br />

by… experienced … motivating partners employees<br />

in our branch internships with the<br />

… offering them<br />

and provide financial<br />

offices to support<br />

prospect of training<br />

resources refugees and in their<br />

and employment.<br />

coordinators. areas. We cooperate<br />

with experienced<br />

partners and provide<br />

financial resources<br />

and coordinators.<br />

PLANNED RELIEF EFFORTS IN FIGURES:<br />

PLANNED RELIEF EFFORTS IN FIGURES:<br />

up to 1,000,000,<br />

… support federal,<br />

state, and local<br />

authorities<br />

… … making support properties<br />

federal, state<br />

and local authorities<br />

available for<br />

refugee housing<br />

and providing staff<br />

for administrative<br />

tasks. … making properties<br />

available for<br />

refugee housing and<br />

providing staff for<br />

administrative tasks.<br />

… euros in financial support for local<br />

refugee aid efforts<br />

With the first pillar, we seek to stimulate<br />

employee engagement by motivating employees<br />

in our branch offices to support<br />

refugees in their areas. As we ramped<br />

up internal communication efforts to<br />

inform employees throughout Germany<br />

about the initiative, we received a strong<br />

response to the call to get involved. There<br />

are now some 13,000 Deutsche Post DHL<br />

Group employees volunteering in 650<br />

projects, along with 100 volunteer coordinators<br />

providing a communications<br />

interface between employees and aid<br />

organizations. We are also providing<br />

€ 1 million in funding for local projects<br />

in which our employees are involved.<br />

up to 100.000 ,<br />

up to 10.000 ,<br />

up to 1.000 ,<br />

up to 100<br />

… m² of Deutsche Post properties for<br />

refugee housing<br />

… employees in Deutsche Post branch<br />

offices as volunteers<br />

… internships for young adults throughout<br />

Germany<br />

… coordinators to act as contacts for employees<br />

and aid organizations<br />

The second pillar of our refugee aid initiative<br />

is to provide vocational orientation,<br />

including by offering 1,000 internships<br />

for young adults throughout Germany.<br />

The internship program has been set<br />

up at all Deutsche Post mail and parcel<br />

Deutsche Post DHL Group has won the<br />

German CSR Award in the special category<br />

"successful refugee support measures.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 79


Partners in action<br />

Our employees volunteer with the<br />

following partner organizations:<br />

• Stiftung Lesen, reading aloud to<br />

facilitate language acquisition<br />

• SOS Kinderdorf, caring for<br />

refugees who are unaccompanied<br />

minors and families with children<br />

• Teach First Deutschland, schooling<br />

in “welcome” classes<br />

• Aktion Deutschland Hilft, aid<br />

projects for refugees in Germany<br />

and operation of refugee<br />

accommodations<br />

centers. These are low-threshold positions<br />

as sorters and loaders, for example, allowing<br />

the deployment of interns with<br />

limited language skills. The idea is to<br />

give refugees an insight into the working<br />

world in Germany. Employees at the various<br />

branches take charge of the interns,<br />

both during the internships and beyond,<br />

such as by helping them learn German,<br />

providing car pooling, and so on. This<br />

standardized process was agreed centrally<br />

with the Federal Employment Agency<br />

and has been implemented country-wide.<br />

With regard to the third pillar of support<br />

for federal, state, and local authorities, we<br />

are making available 100,000 sq meters<br />

of properties to shelter refugees.<br />

Industry initiatives<br />

In addition to the above, Deutsche Post<br />

DHL Group also takes part in various<br />

industry-led refugee aid initiatives<br />

within Germany, including Wir Zusammen<br />

and InCharge. Wir Zusammen is a<br />

platform that consolidates industry-led<br />

integration initiatives within Germany.<br />

It is meant to encourage companies to<br />

invest in long-term integration initiatives,<br />

with more than 50 companies<br />

taking part.<br />

InCharge helps refugees of all ages find<br />

their footing in the labor market. It<br />

matches refugees with mentors based<br />

on the individual’s vocational or professional<br />

qualifications – an engineer<br />

with an engineer or a courier with a<br />

courier, for example. So far, more than<br />

30 companies are taking part in the<br />

initiative.<br />

Positive response<br />

As the Deutsche Post DHL Group employees<br />

in Germany come from so many different<br />

countries around the world, many<br />

of them are familiar with the home regions<br />

and cultures of the refugees, which<br />

makes it easier for us to provide effective,<br />

targeted support. These employees are<br />

working with our partner organizations,<br />

“<br />

We consider this to be a<br />

model initiative that will<br />

have a long-term return on<br />

investment, and this action<br />

will have strong resonance<br />

within further initiatives. ”<br />

Dr. Wilfried Vyslozil, Executive Chairman<br />

SOS-Children's Villages Worldwide<br />

“<br />

After initial assistance for refugees, their integration<br />

is both an obligation and an opportunity for our society,<br />

and one of the most important tasks for aid organizations.<br />

The initiative makes an extremely important contribution.<br />

We’re very thankful that we can take part in this initiative<br />

and we’re very pleased that Deutsche Post DHL Group<br />

is taking responsibility. ”<br />

Bernd Pastors, Chairman of Aktion Deutschland Hilft<br />

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acting as reading buddies and integration<br />

guides for refugees, for example.<br />

To help them prepare for their volunteer<br />

role, we organize information events for<br />

Deutsche Post DHL Group employees<br />

to provide tips on effective interaction<br />

and brief them on the substance of the<br />

teaching materials. For example, in our<br />

partnership with Stiftung Lesen, we provide<br />

guidance along with a specially<br />

designed start-up box of books to prepare<br />

employees in their role as volunteer reading<br />

buddies. In addition, all volunteers<br />

receive polo shirts for enhanced visibility,<br />

which are also a token of our appreciation<br />

for their efforts. The response from<br />

employees has been very positive, with<br />

thousands signing up to take part in<br />

hundreds of different activities in the<br />

first weeks.<br />

The strong support received from our top<br />

management and employees internally<br />

– as well as from our partners, local<br />

authorities, and communities externally,<br />

not to mention the refugees themselves<br />

– attests to the power of this compassionate<br />

action. The Deutsche Post DHL<br />

Group Refugee Aid Project brings together<br />

our company, our employees, and<br />

our communities in a collaborative effort<br />

that is consistent with our commitment<br />

to the <strong>Global</strong> <strong>Compact</strong> Principles.<br />

“<br />

As a company with a strong presence both in Germany<br />

and throughout the world, we want to contribute to<br />

the integration of refugees jointly with our partners.<br />

In doing this, we also continue to support a<br />

long-established tradition of volunteering among our<br />

employees in cooperation with non-profit organizations. ”<br />

Frank Appel, CEO Deutsche Post DHL<br />

Left: Employees with migration backgrounds<br />

get involved as translators / interpreters,<br />

integration guides and “bridge builders.”<br />

Center: Various activities, incl. with FC<br />

Deutsche Post: e.g. organization of a summer<br />

festival, collection of sporting goods, and<br />

charity tournaments.<br />

Right: Several branch offices initiated<br />

collection programs for toys, clothing, and<br />

other everyday articles for local refugee<br />

housing.<br />

“<br />

In the end, it will be our<br />

schools that provide the<br />

litmus test for how well<br />

Germany rises to meet the<br />

challenge of integrating<br />

refugees and providing them<br />

with prospects for the<br />

future. It’s a challenge faced<br />

by our society as a whole,<br />

a challenge to be shouldered<br />

by many. ”<br />

Ulf Matysiak, Managing Director of<br />

Teach First Deutschland<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 81


Deutsche Telekom Helps<br />

Refugees All over Europe<br />

By Gabriele Kotulla, Deutsche Telekom<br />

No issue has preoccupied the entirety of Europe in the last year<br />

more than the vast numbers of people seeking refuge. In 2015,<br />

more than a million asylum seekers came to Germany alone.<br />

The numbers across Europe are many times higher. In view of<br />

the huge volume of refugees, Deutsche Telekom AG has specifically<br />

stepped up its commitment to the refugee aid efforts. And<br />

many various national companies are also making significant<br />

contributions. The range of support being offered varies among<br />

German companies as well as among the different European<br />

national companies according to the national situation.<br />

(Figures as of May <strong>2016</strong>)<br />

Deutsche Telekom<br />

In August 2015 Deutsche Telekom created<br />

a taskforce to coordinate different aid<br />

activities in Germany, for example, the<br />

supply of free WiFi to some 70 refugee<br />

reception centers. We set up a portal,<br />

“refugees.telekom.de,” which provides<br />

refugees with information on the asylum<br />

process and on living and working in Germany.<br />

The information portal has now<br />

been visited more than a million times.<br />

In addition, we offer refugees internships<br />

and scholarships at the company’s<br />

own University of Applied Sciences in<br />

Leipzig (HfTL).<br />

Together with our partners Jobware and<br />

Jobstairs, Deutsche Telekom has developed<br />

the “careers4refugees.de” portal.<br />

Companies can post their job vacancies<br />

free of charge on the site, which is geared<br />

specifically to refugees. To date, some 70<br />

introductory and youth internships as<br />

well as 10 university scholarships have<br />

been provided via the job portal. Eight<br />

of the scholarship holders have already<br />

begun their studies. But it is not just<br />

the numbers that talk for themselves.<br />

The careers4refugees.de portal won two<br />

awards after just a few weeks: firstly, the<br />

special award “Employer Branding Innovation”<br />

from the Trendence Institute;<br />

secondly, the Special Award from Queb.<br />

The Quality Employer Branding Network<br />

praised the platform for providing<br />

refugees with “fast and unbureaucratic<br />

assistance” in seeking employment in<br />

today’s labor market.<br />

Also, more than 550 Deutsche Telekom<br />

civil servants have switched to the German<br />

Federal Office for Migration and<br />

Refugees (BAMF), where they help process<br />

applications for asylum. Deutsche<br />

Telekom employees have organized more<br />

than 100 social days and aid projects via<br />

the “engagement@telekom” platform.<br />

T-Mobile Austria<br />

T-Mobile Austria donated around € 60,000<br />

in 2015 to support the refugee aid efforts<br />

of Caritas and provides desperately<br />

needed accommodation. The company<br />

also facilitated hundreds of WiFi spots at<br />

Caritas housing and provided thousands<br />

of SIM data cards with data volumes for<br />

smartphones. T-Mobile now sets aside<br />

10 percent of its training positions in<br />

Vienna annually for young, unaccompanied<br />

refugees, a project which began<br />

in 2010 and on which the company is<br />

collaborating closely with the private<br />

“lobby.16” initiative. T-Mobile Austria<br />

also supports the “hallo” app, which<br />

helps refugee children learn German.<br />

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T-Mobile Netherlands<br />

T-Mobile Netherlands decided to initiate a partnership with<br />

VluchtelingenWerk Nederland and donated technology and<br />

prepaid SIM cards to the first 10,000 refugees. These SIM cardholders<br />

are also being invited to job application workshops<br />

and soft-skill training courses, as well as being provided with<br />

apps to help them to find their way around the Netherlands.<br />

Slovak Telekom<br />

Slovak Telekom set up lines for donating money via text messages.<br />

A total of € 2,000 was donated to two domestic NGOs.<br />

Furthermore, Slovak Telekom donated € 2,000 to the #DomovNa-<br />

Mame project, which offers canvas baby carriers to refugees.<br />

Magyar Telekom<br />

Magyar Telekom is helping with its own resources. Free WiFi<br />

services have been built in two refugee camps, and power<br />

strips have been provided for the sake of helping refugees to<br />

connect and get information.<br />

T-HT Hrvatski Telekom<br />

Hrvatski Telekom donated money to the Red Cross and has<br />

given employees who volunteer a day off. In addition, HT<br />

provided the refugee camp with 10 USB sticks for free LTE<br />

internet access and around 360 SIM cards, with free GB storage<br />

and call time included.<br />

Crnogorski Telekom<br />

In September 2015 Crnogorski Telekom joined in an action<br />

initiated by the Red Cross and collected aid for migrants in<br />

southeast Europe through a humanitarian hotline. By sending<br />

a text message, their customers were able to donate one euro.<br />

Makedonski Telekom<br />

On the occasion of the Guiding Principles Day on September 24,<br />

Makedonski Telekom called for humanitarian action among<br />

its employees. A donation of 20 boxes with canned food and<br />

bottled water were given to the Red Cross.<br />

OTE & Cosmote<br />

One of the initiatives supported by the OTE Group was the<br />

work and mission of the Hellenic Coastguard. By covering the<br />

cost of repairing and maintaining more than 50 vessels, the<br />

OTE Group contributed to the Hellenic Coastguard’s successful<br />

response of saving more than 74,000 refugee lives within<br />

just five months in 2015. The support also includes the free<br />

provision of telecommunication products to facilities, the support<br />

of NGOs, and the realization of volunteering projects.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 83


A Pioneer for Women's<br />

Economic Security<br />

By Syed Najmus Saquib and Tanvir Hussain, Green Delta Insurance<br />

Bangladesh is a developing country in which women comprise<br />

more than 52 percent of the total population as well as the<br />

fastest-growing segment of the workforce. There exists a nexus<br />

between gender equality and economic growth. An example is<br />

Nibedita, which is the first comprehensive insurance scheme<br />

for women in South Asia.<br />

Director and CEO of GDIC. She holds<br />

the unique distinction of being the first<br />

female CEO in the Bangladesh insurance<br />

industry. It is through her visionary and<br />

dynamic leadership that Nibedita came<br />

into being.<br />

The nurturing and support of its visionary<br />

employees, such as Chowdhury, and<br />

the implementation of innovative projects<br />

and products have led to an improvement<br />

of the conditions of women<br />

employees within the company. It has<br />

also made GDIC a pioneer in empowering<br />

women in the insurance sector of<br />

Bangladesh.<br />

Current statistics on women in<br />

Bangladesh<br />

Nibedita was launched by Green Delta<br />

Insurance Company Ltd. (GDIC), the first<br />

leading insurance company in Bangladesh<br />

to receive an AAA rating. Through<br />

its efforts, the company has not only<br />

attended to improving conditions for<br />

its own women employees but also provided<br />

resources for all working women<br />

of Bangladesh.<br />

Setting the tone at the top<br />

Nibedita was initiated in 2013. It was the<br />

brainchild of Farzana Chowdhury, ACII<br />

(UK) and Chartered Insurer, Managing<br />

• Comprise more than 52 percent of the<br />

population<br />

• 10.62 million working in job sector<br />

• Constitute 80 percent of RMG workers<br />

• 7.8 million young working women<br />

• Women unemployment rate reduced<br />

to 5.8 percent<br />

• Around 10 percent of total entrepreneurs<br />

are women<br />

• 200,000 women working abroad<br />

Role of women in Bangladesh rising<br />

Women are now playing more significant<br />

roles in the domestic, social, and business<br />

spheres of Bangladesh.<br />

Women’s empowerment is the prerequisite<br />

for the socioeconomic development<br />

of a country. As a developing country<br />

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with a steadily growing economy, Bangladesh<br />

has seen a sharp rise in the number<br />

of women becoming more involved in<br />

economic activities, both at the micro<br />

and macro levels. As a result, issues<br />

such as gender equality and women’s<br />

empowerment, among others, are widely<br />

discussed. This eventually led to the<br />

concept of Nibedita, which caters to the<br />

needs of women and helps them become<br />

more self-dependent.<br />

What makes Nibedita unique<br />

This is the first scheme of its kind in the<br />

region to center on women. Besides the<br />

traditional accidental coverage areas,<br />

Nibedita also covers a few extended areas,<br />

for example trauma allowance in cases<br />

of rape, road bullying, robberies, and<br />

acid attacks. The extended coverage also<br />

includes loss or damage to household<br />

goods / personal effects due to fire / lightening,<br />

riots, storms, typhoons, floods,<br />

cyclones, and earthquake. It does not,<br />

however, cover preexisting disabilities,<br />

nor death, injury, or disablement arising<br />

from actions while intoxicated or under<br />

the influence of drugs and so on.<br />

Nibedita provides a maximum coverage<br />

of BDT 10,00,000 (10 lac) with the<br />

minimum net premium of BDT 580 per<br />

person (including VAT) per lac.<br />

GDIC has deployed a special sales force<br />

mostly consisting of women who go<br />

from door to door to generate awareness<br />

regarding Nibedita, as many are still<br />

unaware of the significance of having<br />

an insurance policy. Besides, when promoting<br />

it among women, Green Delta<br />

gives the utmost importance to creating<br />

awareness among men so that they<br />

become equally interested in availing<br />

themselves of policies for the women<br />

in their families.<br />

<strong>Global</strong> recognition<br />

Recently, Chowdhury was recognized<br />

as one of the ten Local SDG Pioneers<br />

by H.E. Ban Ki-moon at the UN <strong>Global</strong><br />

<strong>Compact</strong> Leaders Summit <strong>2016</strong> in the<br />

UN Headquarters, New York. She has<br />

been hailed as a pioneer for women’s<br />

economic security and for her leadership<br />

in guiding her teammates through the<br />

Nibedita scheme in increasing women’s<br />

freedom and playing a pivotal role in<br />

achieving SDG 5 for Gender Equality<br />

and Women’s Empowerment.<br />

Chowdhury elaborates on Nibedita, saying:<br />

“Green Delta Insurance Company<br />

Ltd. has created a platform for growth,<br />

corporate governance, youth leadership,<br />

and especially women empowerment.<br />

More than 52 percent of our population<br />

is female today, and when it comes to human<br />

rights, women are always the ones<br />

that get neglected and their rights are<br />

frequently violated. Nibedita has been<br />

launched while keeping the healthcare,<br />

safety, and social needs of the females<br />

of our nation in mind. We are going<br />

beyond insurance.”<br />

Lives inspired<br />

Since 2013, around 5,000 women have<br />

availed themselves of the Nibedita<br />

scheme to safeguard their futures. The<br />

policyholders range from university students<br />

and housewives to entrepreneurs,<br />

corporate leaders, athletes, and artists.<br />

A good number of policyholders have<br />

already benefited from this scheme.<br />

Going beyond insurance – the way<br />

forward<br />

Nibedita has reached beyond the world<br />

of insurance. Nibedita has created a<br />

Nibedita has created a One Stop Service<br />

Solution Platform for Women Healthcare,<br />

Safety, and Social Needs to support<br />

the women who are in actual need of it,<br />

in any form. A digital platform is being<br />

created for the Nibedita women, which<br />

will give them access to a better lifestyle,<br />

healthcare, and most importantly, safety.<br />

Nibedita is working to bring together<br />

women from all walks of life so they<br />

can be of help to each other by sharing<br />

experiences and best practices.<br />

Nibedita is working as the voice of the<br />

voiceless. It can inspire oppressed women<br />

and act as their partner in need. This<br />

product aims at bringing a positive<br />

and visible change to society. With the<br />

Nibedita policy, women will find strength<br />

in their time of peril. Thus, Nibedita<br />

is playing a vital role in shaping the<br />

mindsets of the women of Bangladesh<br />

to become self-dependent.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 85


Being one with the global<br />

community<br />

By Corporate Social Responsibility Office, Manila Doctors Hospital<br />

2015 proved to be a pivotal year as the global community welcomed the 17 Sustainable Development<br />

Goals (SDGs) and participated vigorously during the COP21 in Paris. So many opportunities<br />

are now being presented to the business sector to prove that it can be a force for good. As a responsible<br />

corporate citizen, the Manila Doctors Hospital (MDH) readily took action in identifying<br />

where it can best contribute toward the achievement of the Sustainable Development Goals in the<br />

Philippines. By choosing to focus on three SDGs, the Corporate Social Responsibility office (CSR) of<br />

MDH will allow it to maximize its resources and make a long-term commitment with its partners.<br />

SDG 3: Ensure healthy lives and<br />

promote well-being for all at all ages<br />

Although MDH is a privately owned,<br />

tertiary hospital, it has for years created<br />

a mechanism that makes it possible<br />

for social service patients to access the<br />

rights-based delivery of world-class medical<br />

care through its various CSR health<br />

programs. One principle that rules our<br />

service provision for the economically<br />

disadvantaged patients is inclusivity. To<br />

achieve inclusivity, MDH fully embraced<br />

the concept of universal health care. An<br />

MDH CSR strategy was to take the necessary<br />

steps in harmonizing resources from<br />

partners: Philippine Health Insurance<br />

Corporation (PhilHealth) (national health<br />

insurance program); Metrobank Foundation,<br />

Inc. (majority owner of Manila Doctors<br />

Hospital); and the Philippine Charity<br />

Office (PCSO) (principal government<br />

agency that raises and provides funds<br />

for health programs and medical assistance).<br />

By doing so, we are able to focus<br />

on providing not just quality healthcare<br />

but protection against the financial risk<br />

of high out-of-pocket health spending.<br />

Another MDH CSR strategy is the community-based<br />

issuance of the MDH blue<br />

card to economically disadvantaged patients<br />

and dependents who qualify. The<br />

MDH blue card allows patients who need<br />

medical consultation to access service<br />

for only one hundred pesos (PHP 100),<br />

which is equivalent to two US dollars.<br />

Blue-card holders are also entitled to<br />

access 143 laboratory procedures at a<br />

50 - 70 percent discounted rate. Should<br />

they need confinement, the MDH CSR Office<br />

under its in-patient program extends<br />

partial subsidies from funds provided to<br />

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MDH CSR by the Metrobank Foundation.<br />

The rest of the medical bills are covered<br />

by PhilHealth, PCSO, and contributions<br />

from the patient. The generated earnings<br />

from the CSR Health Programs are used<br />

to sustain the operations of the MDH<br />

CSR Clinic, where seven of the MDH<br />

medical departments provide medical<br />

consultations from Monday to Saturday<br />

for social service patients.<br />

In 2015 alone, 17,501 blue-card holders<br />

benefited from the services of the<br />

following medical departments: Family<br />

and Community Medicine, Pediatrics,<br />

Otorhinolaryngology, Internal Medicine,<br />

Obstetrics and Gynecology, Ophthalmology,<br />

and General Surgery. There<br />

were 4,684 who made use of the various<br />

laboratory procedures at a discounted<br />

rate, whereas 1,071 needed confinement<br />

and benefited from the support of our<br />

partners in covering the healthcare costs.<br />

SDG 5: Achieve gender equality and<br />

empower all women and girls<br />

2015 saw the launch of Men Caring<br />

for Women (MCW), spearheaded by<br />

the male officers of the Manila Doctors<br />

Hospital and led by the Hospital<br />

Director himself. MCW is an advocacy<br />

and resource-generation campaign in<br />

support of the fight against cervical<br />

cancer, violence against women and<br />

children (VAWC), and human trafficking.<br />

The proceeds from the first fundraising<br />

activity enabled MDH CSR and its<br />

partners to support the initial series of<br />

capacity-building trainings of volunteer<br />

lawyers, court social workers, and<br />

frontliners. Experts volunteered their<br />

time to train the participants on how<br />

to prosecute child abuse cases, new<br />

developments on children’s laws (both<br />

local and international), prosecuting<br />

child online sexual exploitation, and<br />

the importance of forensic pathology<br />

in criminal prosecution of VAWC cases.<br />

Consistent with the MCW campaign, a<br />

number of steps were also undertaken to<br />

ensure that gender equality is observed<br />

internally, starting with the comprehensive<br />

orientation / seminar on anti-sexual<br />

harassment in the workplace for officers.<br />

The zero-tolerance policy inside the<br />

hospital strongly reiterates that officers<br />

are expected not only to behave properly<br />

toward subordinates but also protect<br />

them from those who might attempt<br />

to subject them to abusive behavior or<br />

unfair treatment. The open-door policy<br />

of management is just but one of the<br />

accessible tools for reporting a possible<br />

case. This is just one part of a series of<br />

capacity-building steps that will also<br />

cover the MDH non-supervisory staff.<br />

Both MDH CSR and the MDH Human<br />

Resource Division, with support from<br />

the Senior Management Team, recognizes<br />

that all genders have the right to<br />

a safe and supportive workplace in order<br />

to pursue professional development,<br />

which in turn can benefit the business<br />

as a whole.<br />

SDG 13: Take urgent action to<br />

combat climate change and its<br />

impacts<br />

Green Rebellion (Generating Resources &<br />

Engagement for Environment and Nature)<br />

started as a small CSR program that sought<br />

to preserve and revitalize the last forest<br />

park in the City of Manila – the historical<br />

Arroceros Forest Park – and at the same<br />

time create clean and green spaces in the<br />

hospital’s adopted community and school.<br />

Now other corporations have joined the<br />

safest “Rebellion” by adopting their chosen<br />

zone inside the forest park as part of their<br />

own “Green CSR.” Adopting a zone entails<br />

not just financial resources but volunteer<br />

hours and creativity. In the MDH-adopted<br />

public school (Rafael Palma Elementary<br />

School, Manila), vertical urban gardens are<br />

being developed to help create a healthier<br />

environment for learning. In the adopted<br />

community (Barangay 662), recyclable<br />

materials are being utilized in producing<br />

products for the mainstream market. This<br />

not only helps the recycling program of<br />

the community but is also proving to be a<br />

source of income for community members.<br />

Forging ahead<br />

The recognition from the Asian Hospital<br />

Management Awards in 2015 for our CSR<br />

programs serves as a reminder to remain<br />

steadfast in heightening the consciousness<br />

and participation of the public in<br />

targeted health and environment issues<br />

in the global community.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 87


Fighting schistosomiasis<br />

in a strong alliance<br />

Nearly 260 million people suffer from the worm disease schistosomiasis – children in Africa in<br />

particular are affected. Merck, a leading science and technology company, has been cooperating<br />

with the World Health Organization (WHO) in the fight against neglected tropical diseases for<br />

years. Now, with the establishment of the <strong>Global</strong> Schistosomiasis Alliance (GSA), Merck has expanded<br />

this partnership. By bundling the expertise of its members, the GSA aims to effectively<br />

fight and eliminate schistosomiasis worldwide.<br />

By Johannes Waltz, Merck<br />

According to the WHO, around 70 percent<br />

of those affected by schistosomiasis<br />

live in 10 countries in sub-Saharan Africa.<br />

Schistosomiasis is caused by parasites<br />

that lurk in stagnant or slowly flowing<br />

fresh water. It is a vicious circle. The<br />

female’s eggs infest inner organs such<br />

as the colon, spleen, or liver, where the<br />

larvae develop into worms – the eggs<br />

of which are then excreted via the urine<br />

or feces of those infected. Freshwater<br />

snails then act as a host in which the<br />

eggs develop into larvae, which in turn<br />

penetrate the human body.<br />

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Children at particular risk<br />

Schistosomiasis is a typical poverty-related<br />

disease: In the affected countries, the<br />

population often has no access to clean<br />

water or sanitary installations and uses<br />

the polluted water, for example, to bathe,<br />

swim, wash clothes, or fish. Children of<br />

school age are at particular risk, since<br />

they often play in stagnant water. The<br />

consequences of this insidious disease<br />

are severe, with acute symptoms ranging<br />

from skin rashes to life-threatening<br />

fevers. The long-term consequences include<br />

chronic inflammation of various<br />

organs, which can also lead to death. Up<br />

to 200,000 of those affected die each year<br />

from the effects of the disease. Among<br />

children, the symptoms that result are<br />

particularly serious: Schistosomiasis<br />

stunts growth, causes learning disabilities,<br />

and leads to anemia.<br />

The Praziquantel Donation Program<br />

With the launch of its Praziquantel<br />

Donation Program in 2007, Merck made<br />

a commitment to help the WHO combat<br />

schistosomiasis in Africa. The active ingredient<br />

praziquantel was co-developed<br />

by Merck in the 1970s and has proven<br />

to be the most effective therapy to date,<br />

as it can be used to treat all forms of<br />

schistosomiasis. Merck’s efforts are in<br />

line with the WHO roadmap to overcome<br />

neglected tropical diseases, the United<br />

Nations’ Sustainable Development Goals,<br />

and the London Declaration. Merck is<br />

fighting schistosomiasis as part of its corporate<br />

responsibility, within the health<br />

sphere of activity.<br />

In 2015, Merck donated more than 100<br />

million praziquantel tablets to the WHO.<br />

To date, Merck has supplied a total of<br />

around 340 million tablets, which has<br />

enabled the treatment of more than<br />

74 million patients, primarily children.<br />

“We want to give children a new future,”<br />

says Stefan Oschmann, Chairman of<br />

the Executive Board and CEO of Merck.<br />

“The establishment of this alliance underscores<br />

our commitment to fighting<br />

schistosomiasis and means all relevant<br />

partners are on the same page. The only<br />

way to overcome the challenges on the<br />

road to eliminating this disease is by<br />

working together.”<br />

As of <strong>2016</strong>, Merck will donate up to 250<br />

million tablets per year to the WHO –<br />

until schistosomiasis has been eliminated<br />

in Africa. However, providing the praziquantel<br />

tablets is only one part of the<br />

solution. In combating schistosomiasis,<br />

Merck is following an integrated, comprehensive<br />

approach: In parallel to the<br />

donation program, Merck is working on<br />

optimizing the tablets and on developing<br />

a pediatric formulation of praziquantel<br />

for preschool-age children, for whom<br />

the drug is not yet suitable. In addition,<br />

Merck is supporting a WHO awareness<br />

program to educate children in African<br />

schools. Using comic-style booklets designed<br />

for children, the youngsters are<br />

taught about the causes of schistosomiasis<br />

and how to prevent the disease.<br />

Alliance against schistosomiasis<br />

As a founding member of the <strong>Global</strong><br />

Schistosomiasis Alliance, Merck is aiming<br />

to promote greater coordination and<br />

efficiency in the fight against schistosomiasis.<br />

The long-term goal is to eliminate<br />

the disease worldwide, thus contributing<br />

toward ending poverty in the affected<br />

countries and creating new economic<br />

perspectives. At the end of 2014, stakeholders<br />

from government, the private<br />

sector, and civil society came together to<br />

establish the GSA. The founding members<br />

include Merck, World Vision, the<br />

United States Agency for <strong>International</strong><br />

Development, and the Bill and Melinda<br />

Gates Foundation. Their aim is to work<br />

together to achieve greater impact on<br />

the ground.<br />

On the one hand, the GSA assumes a<br />

mediator role in coordinating existing<br />

efforts to combat schistosomiasis. On<br />

the other hand, however, it also acts as<br />

an initiator of innovative projects that<br />

focus on eliminating the disease. To date,<br />

three working groups have been formed<br />

to carry out the GSA’s work. The first<br />

working group manages, monitors, and<br />

documents the distribution of praziquantel<br />

tablets. The second working group<br />

is concerned with raising awareness of<br />

schistosomiasis with the aim of mobilizing<br />

additional funds and resources<br />

to combat the disease. The third group<br />

is dedicated to research and development.<br />

In their activities, all the working<br />

groups pursue the ultimate goal of the<br />

GSA: the elimination of schistosomiasis<br />

worldwide.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 89


A Far-reaching Approach<br />

to Raising Labor Practices<br />

in Agriculture<br />

By Miguel Coleta, Philip Morris <strong>International</strong><br />

When Human Rights Watch unveiled their research in 2009 on<br />

child labor and other labor issues related to tobacco-growing<br />

in Kazakhstan, it prompted Philip Morris <strong>International</strong> (PMI)<br />

to rethink the way it was addressing these issues. Although<br />

the company already had efforts in place, clearly they were<br />

insufficient to gain visibility into these issues and address<br />

child labor. This prompted PMI to seek the advice of Verité<br />

(a leading NGO in supply chain responsibility) and to adopt a<br />

new approach aimed at systematically addressing child labor,<br />

resulting in the launch of PMI’s global Agricultural Labor<br />

Practices (ALP) program in 2011.<br />

Today, more than ever, companies are<br />

expected to have strong policies and due<br />

diligence processes in place to respect<br />

labor and human rights in their supply<br />

chains. Consequently, many companies<br />

have had to reevaluate their approaches<br />

to address these concerns.<br />

When PMI introduced its global ALP<br />

program in 2011 to progressively eliminate<br />

child labor and other labor abuses on<br />

all farms in its supply chain, PMI knew<br />

that to be successful, it would have to go<br />

beyond certifying farmers’ compliance<br />

with standards: Better visibility into the<br />

issues and an understanding of the root<br />

causes of child labor – together with the<br />

combined efforts of government, civil<br />

society, and other industries – would<br />

all be necessary to tackle this complex<br />

problem. Although more work is clearly<br />

needed, this approach – now in its fifth<br />

year of implementation – is delivering<br />

tangible results.<br />

<strong>Global</strong> reach, one-on-one support<br />

With a farm base of approximately<br />

450,000 farmers worldwide – the vast<br />

majority of whom are smallholders<br />

growing tobacco on two hectares or<br />

less – child labor is one of the salient<br />

labor and human rights risks in PMI’s<br />

global tobacco-growing supply chain<br />

spanning nearly 30 countries. Although<br />

the problem is not new or specific to<br />

tobacco-growing in agriculture, this must<br />

not be an excuse for inaction.<br />

PMI’s ALP Code defines the labor practices,<br />

principles, and a set of measurable<br />

standards that embody the company’s<br />

strong commitment to progressively<br />

eliminate child labor and other labor<br />

abuses, and to achieve safe and fair<br />

working conditions on all farms in PMI’s<br />

tobacco-growing supply chain. Suppliers<br />

and farmers are expected to apply and<br />

meet these standards in the framework<br />

of PMI’s commitment to promote good<br />

agricultural practices.<br />

To facilitate this, PMI’s approach includes<br />

establishing direct contracts between<br />

smallholder farmers either with PMI’s<br />

suppliers or with PMI, cutting out layers<br />

of middle-men and often volatile pricing<br />

at auction. Farmers receive agronomy<br />

support to improve the quality and<br />

yield of their crops, training on how to<br />

care for the environment, and help to<br />

achieve safe and fair labor practices on<br />

their farms. Having a secure buyer for<br />

the crop provides farmers with greater<br />

economic stability, while giving PMI<br />

better visibility into farm conditions<br />

and stronger leverage to address labor<br />

issues in its supply chain.<br />

Dedicated field staff bring ALP to life<br />

A team of 3,500 field staff known as ‘Field<br />

Technicians’ (FTs) provide farmers with<br />

technical assistance regularly throughout<br />

the growing season. These “boots on the<br />

ground” live in tobacco communities and<br />

couple agronomy expertise with farmer<br />

training and support on how to meet<br />

the ALP Code Standards. These men and<br />

women develop trusted relationships<br />

with farmers, discussing concerns and<br />

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providing training and operational<br />

support on continuous improvement<br />

practices on the farm: from technical<br />

know-how, certified tobacco and food<br />

seeds, to health and safety equipment<br />

and training, among other issues.<br />

FTs conduct in-depth, internal monitoring<br />

on a farm-by-farm basis, supporting<br />

farmers to meet the ALP Code Standards.<br />

At the beginning of the crop season, FTs<br />

gather detailed information (in the form<br />

of a ‘Farm Profile’) about each farm –<br />

the profile is then used to identify risk<br />

and define areas for improvement. Each<br />

farmer receives several visits throughout<br />

the season aimed at systematically<br />

identifying and addressing labor issues.<br />

As part of this process, FTs are firm and<br />

ALP progress to date<br />

“[Philip Morris <strong>International</strong>’s] Third ALP Progress Report presents a candid<br />

account of our progress, challenges, and achievements in improving labor<br />

conditions on over 450,000 farms worldwide during 2014 and 2015. While a<br />

lot remains to be done, it is encouraging to see tangible progress, including<br />

significant reductions in child labor in several countries due to the hard work<br />

of more than 3,500 trained Field Technicians and strong partnerships with<br />

over 30 not-for-profit organizations.<br />

We hope that by sharing our learnings, our approach serves as an example of<br />

a transformative, holistic system to address complex social and labor issues,<br />

not only in tobacco but in agriculture more widely.”<br />

André Calantzopoulos, Chief Executive Officer, Philip Morris <strong>International</strong><br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 91


A Perfect Example<br />

of “Beyond<br />

Certification”<br />

When the ALP program started in<br />

2011, PMI partnered with Verité to<br />

develop a curriculum for ALP<br />

auditors and train field staff from<br />

Control Union Certifications who<br />

were engaged as third-party<br />

assessors for the program. Since<br />

then, it has been a continuous<br />

learning process as project staff<br />

openly discuss the challenges they<br />

face in different countries. Johan<br />

Maris of Control Union Certifications<br />

shares his experience:<br />

“PMI’s approach to improving labor<br />

conditions in their tobacco-growing<br />

supply chain is a perfect example<br />

of “beyond certification.” In contrast<br />

to many programs, PMI’s focus isn't<br />

simply about the overall outcome,<br />

but much more about having a good<br />

understanding of local circumstances<br />

on the ground.<br />

CU country assessments are<br />

published on www.pmi.com and<br />

give PMI and stakeholders a good<br />

basis for prioritizing the future use<br />

of resources to improve farmer<br />

and worker living and working<br />

conditions. Each report is based on<br />

CU visits to a meaningful sample of<br />

farms, which give a better insight<br />

into conditions on the ground.<br />

Based on the reality that farmers<br />

grow corn, soya beans, and<br />

vegetables alongside their tobacco,<br />

the United Nations <strong>Global</strong> <strong>Compact</strong><br />

can play a key role in bringing<br />

initiatives such as ALP together<br />

so that we learn from each other<br />

and speed up the scaling-up of<br />

sustainable agriculture.”<br />

Johan Maris, Managing Director of Control<br />

Union Certifications<br />

clear about PMI’s expectations while<br />

seeking to build trust with farmers,<br />

discussing how they can adopt sensible<br />

approaches to overcome problems and<br />

problematic practices.<br />

External monitoring is a critical component<br />

of the program and consists of countryspecific<br />

third-party assessments by Control<br />

Union Certifications (CU), which evaluate<br />

ALP implementation. These assessments<br />

include action plans produced by PMI’s<br />

affiliates or its suppliers, committing to<br />

change conditions on farms in light of<br />

the findings and prioritizing areas for<br />

improvement. FTs are fundamental in<br />

ensuring that these plans become a reality.<br />

Transparency of reporting:<br />

A “must-have”<br />

PMI is committed to transparency of<br />

reporting on progress. Together with<br />

ALP country assessments from CU<br />

highlighting ongoing challenges on<br />

farms (assessments to date are publicly<br />

available on www.pmi.com), PMI<br />

publishes regular progress reports on<br />

global implementation of the program<br />

(see: www.pmi.com/ALPprogress).<br />

Tailored community support to<br />

address root causes<br />

Collective efforts of business, government,<br />

and civil society are needed to address<br />

child labor. Under the ALP program, PMI<br />

fosters strong alliances with stakeholders<br />

to guide the implementation of tailored<br />

community initiatives aimed at addressing<br />

the root causes of child labor and fostering<br />

behavioral change in tobacco-growing<br />

areas. This includes reaching out to<br />

civil society organizations, governments,<br />

farmers, and worker representatives in<br />

each country to gain valuable input on<br />

the approach.<br />

Examples of community initiatives<br />

In the Philippines, Pakistan, and Indonesia,<br />

PMI’s local affiliates developed a twopronged<br />

program to reduce the risk of<br />

children being involved in hazardous<br />

farm work. The local ALP Country Teams<br />

equip farmers with a labor-saving device<br />

called ‘clip sticks,’ which allow for a more<br />

efficient preparation of tobacco leaves for<br />

curing, simultaneously reducing the risk<br />

of children being involved in the process.<br />

In parallel, a summer school program for<br />

farmers’ children, run by local NGOs, takes<br />

place during the harvest season.<br />

To assess the efficacy of this program,<br />

PMI’s local affiliates implemented a<br />

detailed protocol of increased random,<br />

unannounced visits during the peak<br />

harvesting season with groups of farmers<br />

who 1) received only clip sticks; 2) whose<br />

children were involved in the summer<br />

school program; 3) were participating in<br />

both initiatives; and lastly, 4) a control<br />

group not involved in the program.<br />

Although further validation is needed, the<br />

assessments in 2015 suggest promising<br />

results showing that summer schools are<br />

not enough and agronomy / operational<br />

support is insufficient in isolation. A<br />

twin-track approach is needed to avoid<br />

unintended consequences or displacing<br />

root causes of child labor on farms. The<br />

assessment will be repeated in the next<br />

crop seasons in these countries and<br />

trialed in Thailand.<br />

Meanwhile, in Latin America, PMI’s affiliate<br />

in Colombia – Coltabaco – is committed<br />

to improving access to, and the quality of,<br />

rural education in tobacco-growing areas.<br />

Over the last eight years, Coltabaco has<br />

supported the “Dividendo por Colombia<br />

Foundation,” which works in partnership<br />

with the Ministries of Education and<br />

Municipality Administrations to oversee<br />

the “Sembrando Futuro” (Sewing future)<br />

projects – namely, ‘new school’ and ‘early<br />

years’ for children aged from 6 months<br />

to 5 years of age, and 6 years to 12 years of<br />

age respectively. The effort has benefited<br />

more than 7,000 children to date, resulting<br />

in the application of a tailored curriculum<br />

for children in disadvantaged rural<br />

communities in multi-grade schools, the<br />

recruitment of 230 additional teachers,<br />

and the building of 180 schools in Bolivar,<br />

Sucre and Santander.<br />

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External feedback<br />

A leading industry example<br />

PMI’s approach to addressing child labor<br />

has come a long way since Human Rights<br />

Watch reported on tobacco-growing in<br />

Kazakhstan in 2009. The US Department<br />

of Labor has since removed Kazakhstan<br />

tobacco from the list of goods produced<br />

from child labor, following a review<br />

and acknowledgement of PMI’s efforts<br />

to eliminate it in the country. Human<br />

Rights Watch has since acknowledged<br />

PMI’s policy efforts and transparency,<br />

both in the United States and in their<br />

latest report on Indonesia: “Transparency<br />

is a key element of effective and credible<br />

human rights due diligence. Philip<br />

Morris <strong>International</strong> appears to have<br />

taken the greatest number of steps to<br />

be transparent about its human rights<br />

policies and monitoring procedures,<br />

including by publishing on its website<br />

its own progress reports as well as several<br />

detailed reports by third party monitors.”<br />

Looking ahead<br />

PMI has established a long-term strategic partnership with Verité, a leading NGO<br />

in supply chain responsibility, to support the ALP program globally. In the first<br />

phase of the program, Verité helped PMI develop the ALP Code, roll it out among<br />

PMI affiliate and supplier staff in tobacco-growing regions, and provide training on<br />

labor issues to worldwide agronomy and ALP staff. Verité is also working with PMI<br />

to establish partnerships with local NGOs and other stakeholders to address the<br />

root causes of underlying labor problems and establish grievance reporting and<br />

remedy mechanisms. Now that the ALP program has largely moved beyond the<br />

initial setup phase in most markets, Verité continues to support PMI with ongoing<br />

capacity-building, technical assistance on issues such as monitoring and impact<br />

evaluation, and strategic advice about the ALP program.<br />

“Verité continues to experience PMI as a partner that is open to external input,<br />

responsive to stakeholder suggestions, valuing of others’ expertise, strategic<br />

in its thinking, committed in its resourcing, and reflective on the need to adapt.<br />

The company’s approach to the serious problems in its tobacco production over<br />

the past five years puts it at the leadership level among multinationals.” [...]<br />

“PMI continues to achieve a commendable level of disclosure. During this period<br />

[2014–2015], the company published on its website third-party assessment<br />

reports on ALP implementation in Brazil, Mexico, Italy, the Philippines, and the<br />

United States with additional reports from audits conducted during 2014–2015<br />

forthcoming. This monitoring is done against 32 measurable Standards on over<br />

450,000 farms in approximately 30 countries – a massive undertaking that<br />

bolsters the credibility and validity of PMI’s problem-solving interventions.”<br />

Verité’s Chief Executive Officer, Dan Viederman, commenting in PMI’s Third ALP Progress Report<br />

PMI is strongly committed to improving<br />

living and working conditions and<br />

addressing child labor and other labor<br />

abuses in its tobacco-growing supply chain.<br />

Alongside the many process challenges<br />

of making sure risks are identified on<br />

farms and effective steps are taken<br />

to address them, these are difficult,<br />

emotional, and culturally-sensitive issues<br />

to resolve. PMI will continue to build on<br />

the strong foundations of ALP program<br />

implementation, ranging from improved<br />

data collection and support to farmers<br />

in meeting the ALP Code, to ongoing<br />

farm-by-farm monitoring, and support<br />

to help farmers continuously improve<br />

and address problematic practices.<br />

External assessments remain essential<br />

in understanding the impact of activities<br />

and to identify areas for improvement.<br />

Close cooperation with government, civil<br />

society, and other industry partners to<br />

develop lasting solutions to these issues is<br />

also a fundamental part of PMI’s approach,<br />

together with openly sharing the learnings<br />

of the program through transparent public<br />

reporting on progress.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 93


SAKHAlIn: PRoMoTInG<br />

lAnGUAGe RIGHTS on<br />

InDIGenoUS ISlAnD<br />

Sakhalin energy Investment Company ltd., an operator of the Sakhalin-2 oil and gas project,<br />

performs its activities on the island of Sakhalin, home to the nivkhi, Uilta (orok), evenki, and nanai<br />

indigenous peoples. Some of the project’s assets are located near the areas of the traditional<br />

residence and economic activities of the indigenous peoples. naturally, the company pays special<br />

attention to effective engagement with indigenous Sakhaliners. Since 2006 a special program<br />

– the Sakhalin Indigenous Minorities Development Plan (SIMDP) – has been implemented through<br />

a partnership between the Sakhalin government and the Regional Council of Authorized Representatives<br />

of Sakhalin Indigenous Peoples.<br />

By Natalia Gonchar, Sakhalin Energy<br />

In addition to the SIMDP, Sakhalin Energy<br />

focuses on the preservation and<br />

promotion of the cultural and linguistic<br />

heritage of Sakhalin’s indigenous minorities.<br />

This was one of the key priorities<br />

identified by Sakhalin’s indigenous peoples<br />

during open public consultations<br />

held during the development of the<br />

SIMDP. A significant number of indigenous<br />

Sakhaliners defined languagerelated<br />

projects as being critically important.<br />

In addition, from the experts’ point<br />

of view, the death of a language may<br />

result in the loss of the native speakers’<br />

ethnic identity. As all of the languages<br />

of Sakhalin’s indigenous peoples are<br />

seriously endangered, Sakhalin Energy<br />

is making efforts to preserve them and,<br />

consequently, the indigenous cultures.<br />

It needs to be mentioned that, for many<br />

years, the natural assimilation of indigenous<br />

languages took place in Russia,<br />

due to a host of factors. Being the majority<br />

language, Russian serves both as a<br />

unifying factor and as an intermediary<br />

when studying foreign languages and<br />

global culture.<br />

Certainly the government implements<br />

programs for the support and development<br />

of native languages. It is not<br />

preferable for business to overlap with<br />

state-run projects. However, business can<br />

also contribute and provide funding in<br />

the areas that for whatever reason cannot<br />

be financed by the government. In order<br />

to effectively preserve languages and<br />

culture, multi-partner efforts are vital.<br />

Sakhalin Energy projects generally comply<br />

with the provisions of the UNESCO<br />

Convention for the Safeguarding of the Intangible<br />

Cultural Heritage, which covers:<br />

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• oral traditions and expressions, including<br />

language as a vehicle of the<br />

intangible cultural heritage;<br />

• performing arts;<br />

• social practices, rituals, and festive<br />

events;<br />

• knowledge and practices concerning<br />

nature and the universe;<br />

• traditional craftsmanship.<br />

The company’s language-support projects<br />

first of all include the publication<br />

of books, textbooks, and dictionaries in<br />

indigenous languages. An example of<br />

this is the series of publications in the<br />

Uilta language. Until this century, the<br />

Uilta language was a completely oral<br />

language. With 295 Uilta people and<br />

just several native speakers remaining,<br />

it seemed that the Uilta language did not<br />

have a chance and that the unique heritage<br />

of these people will be irretrievably<br />

lost. But the Uilta elder people, scientists,<br />

linguists, and the company combined<br />

their knowledge and resources and after<br />

several years published The Orok-Russian /<br />

Russian-Orok Dictionary, The Uilta ABC, and<br />

The Uilta Language as Historic-Ethnographic<br />

Source Dictionary. This is not an absolute<br />

recovery, but it offers hope.<br />

Sakhalin Energy provides funding for the<br />

publication of folklore literature, such<br />

as an unprecedented publication of The<br />

Epic Book of Sakhalin Nivkhi, prepared by<br />

a world-famous Nivkh writer, Vladimir<br />

Sangi. The Epic Book is published in Nivkh<br />

and Russian and is ranked among the<br />

famous books The Kalevala and The Song<br />

of Hiawatha.<br />

In order to ensure the development of a<br />

social-cultural environment for language<br />

preservation, it is important to have<br />

mass media in indigenous languages.<br />

Sakhalin Energy provided support for<br />

the newspaper The Nivkh Dif, which is<br />

published in Nivkh and Russian.<br />

There were several events supported by<br />

the company that played a significant<br />

role in the promotion of Sakhalin’s indigenous<br />

languages. The key one was<br />

the “First <strong>International</strong> Symposium in<br />

the Languages of the Indigenous Peoples<br />

of the Russian Far East,” which was arranged<br />

in the town of Yuzhno-Sakhalinsk,<br />

Sakhalin Oblast, Russia. Next was the<br />

“<strong>International</strong> Workshop Preservation<br />

and Promotion of Cultural and Linguistic<br />

Heritage of Sakhalin Nivkhi,” which<br />

was held in the UNESCO Headquarters<br />

in Paris.<br />

When speaking about the preservation<br />

of languages, it is equally important to<br />

mention their development as any living<br />

language, in comparison with the dead<br />

ones, is a flexible mechanism and changes<br />

influenced by society. The special project<br />

targeted at the preservation and development<br />

of Sakhalin’s indigenous languages<br />

was implemented jointly by Sakhalin<br />

Energy and the Office of the UN High<br />

Commissioner for Human Rights in Russia.<br />

The project includes the translation of the<br />

Universal Declaration of Human Rights<br />

and the UN Declaration on the Rights of<br />

Indigenous Peoples into the languages<br />

of Sakhalin’s indigenous peoples. Each<br />

declaration was published in a separate<br />

booklet and in a joint brochure, including<br />

as well brief information about the<br />

peoples and a CD with recordings of the<br />

texts read aloud by native speakers. According<br />

to linguists’ expertise, such an<br />

initiative gives a fresh impetus to language<br />

development, as political vocabulary can<br />

be new to indigenous languages and neologisms<br />

are created. As Vladimir Sangi,<br />

who translated both declarations into the<br />

Nivkh language, says: “I needed to invent<br />

the word ‘freedom’ in the Nivkh. Because<br />

we never needed one before. The Nivkhi<br />

had never known what ‘unfreedom’ was,<br />

so ‘freedom’ was our natural state that did<br />

not require a special name for it.”<br />

Projects such as the translation of UN<br />

declarations into indigenous languages<br />

also increase the social prestige of the<br />

minority languages. Another relevant<br />

initiative was recently implemented when<br />

the painstaking efforts of elderly people,<br />

linguists, and the company’s employees resulted<br />

in the illustrated corporate calendar<br />

showing traditional culture and economic<br />

activities of Sakhalin’s indigenous peoples,<br />

with months’ names in their languages<br />

and explanations provided in Russian. It<br />

should be noted that months’ names in<br />

languages of the indigenous peoples are<br />

semantically related to peoples’ traditional<br />

cultures or the natural and climate characteristics<br />

of the territories. Along with<br />

the Russian national holidays, the dates<br />

important for indigenous peoples were<br />

also highlighted: August 9 as the <strong>International</strong><br />

Day of the World’s Indigenous<br />

Peoples, February 21 as <strong>International</strong><br />

Mother Language Day, March 30 - 31 as the<br />

date for the establishment of the Russian<br />

Association of Indigenous Peoples of the<br />

North, Siberia, and Far East, etc. What is<br />

important to mention is that this calendar<br />

was extremely popular among both indigenous<br />

and non-indigenous stakeholders<br />

and won first prize in the All-Russian<br />

Contest of Corporate Calendars <strong>2016</strong>.<br />

The work on language preservation is<br />

continuing. It cannot stop until all the<br />

languages are no longer endangered<br />

– unfortunately, this is a hope for the<br />

remote future.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 95


Playing Our Part in<br />

Addressing the Impact of<br />

Climate Change on Health<br />

By Gregory Lamory, Sanofi<br />

The year 2015 marked a turning point in the fight against climate change. The signing of the<br />

Paris Agreement during COP 21 in December marked an important step in the move toward<br />

limiting an increase in global temperatures. This agreement is not just a climate agreement;<br />

it is also a major health agreement. Indeed, as the World Health Organization (WHO) points out:<br />

“Between 2030 and 2050, climate change is expected to cause approximately 250,000 additional<br />

deaths per year, from malnutrition, malaria, and diarrhea to heat stress.”<br />

In its report published in June 2015, the<br />

Lancet Commission on health and climate<br />

change warned about the threat that climate<br />

change represents for health: “The<br />

effects of climate change are being felt<br />

today, and future projections represent an<br />

unacceptably high and potentially catastrophic<br />

risk to human health. The implications<br />

of climate change for a global<br />

population of 9 billion people threatens<br />

to undermine the last half century of<br />

gains in development and global health.”<br />

production in certain areas, the health<br />

effects of a changing climate are likely<br />

to be overwhelmingly negative. Climate<br />

change is expected to lead to increases in<br />

ill health in many regions, and especially<br />

in low-income countries. Direct effects<br />

include temperature-related illnesses and<br />

death during extreme weather events.<br />

Sanofi Pasteur, Neuville-sur-Saône site<br />

Indirect impacts include the influence<br />

of climate on microbial populations, the<br />

distribution of vector-borne diseases, host<br />

resistance to infectious agents, food and<br />

water shortages, food-borne diseases, and<br />

the consequences on non-communicable<br />

diseases such as cardiovascular and respiratory<br />

diseases.<br />

There is therefore a need for the international<br />

health community – public and<br />

private – to get mobilized to address this<br />

health challenge – and Sanofi is ready<br />

to play its part.<br />

Climate change directly and indirectly<br />

affects social and environmental determinants<br />

of health, such as clean air, safe<br />

drinking water, nutrition, etc. Although<br />

global warming may bring some localized<br />

benefits, such as fewer winter deaths in<br />

temperate climates and increases in food<br />

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Areas with weak health infrastructure<br />

– mostly in developing countries – will<br />

be the least able to cope with the negative<br />

health effects of a fossil fuel-based<br />

energy system or the indirect effects of<br />

climate change on their communities<br />

without assistance in preparing for, and<br />

responding to, the impacts of climate<br />

change.<br />

In this context, in addition to the mitigation<br />

efforts already being carried out by<br />

Sanofi and its commitment to reducing<br />

greenhouse gas emissions, Sanofi brings<br />

its value by raising awareness about<br />

the consequences of climate change on<br />

health and by providing health solutions<br />

for climate-sensitive diseases.<br />

Raising awareness about the<br />

impacts of climate change on health<br />

Sanofi began addressing the climate<br />

change and health nexus a few years<br />

back. We set up an internal working<br />

group whose mission was to define the<br />

role that we should play on this issue<br />

– as a global health leader, Sanofi has<br />

a responsibility to address the threats<br />

posed by climate change. We developed<br />

a dedicated advisory board with external<br />

experts from the climate and health<br />

fields. This enabled us to better understand<br />

the stakes related to the impacts<br />

of climate change on health and identify<br />

areas in which we would have the greatest<br />

added value.<br />

Our Chief Executive Officer, Olivier<br />

Brandicourt, embodies our commitment<br />

to tackle the impacts of climate change<br />

on health. In June 2015, he was one of<br />

the few CEOs from the pharmaceutical<br />

sector who signed a statement to<br />

support the publication of the Lancet<br />

Commission’s report on climate change<br />

and health. On November 27, 2015, on<br />

the eve of COP 21, Mr. Brandicourt published<br />

an op-ed in the French newspaper<br />

Le Monde. This op-ed called for integrating<br />

health into the official negotiations<br />

of COP 21. It was translated into several<br />

languages and published in major newspapers<br />

in Brazil, Germany, India, Spain,<br />

and the United States.<br />

This strong commitment also materialized<br />

through our involvement in COP 21.<br />

We were the only pharmaceutical company<br />

to be an official partner of COP 21.<br />

We also organized a series of events in<br />

December in Paris to raise awareness<br />

about the impacts of climate change<br />

on health, including a roundtable with<br />

representatives from international organizations<br />

(WHO, UN Foundation) and<br />

a public conference with non-profit<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 97


organizations (Drugs for Neglected Diseases<br />

initiative – DNDi), and climate and<br />

health experts.<br />

Offering health solutions for<br />

climate-sensitive diseases<br />

Over the years, we have developed expertise<br />

in many disease areas most likely<br />

to be affected by climate change. We<br />

work to provide solutions to prevent<br />

and respond to the direct and indirect<br />

impacts of climate change on health. This<br />

includes the development of medicines<br />

and vaccines to address the health risks<br />

of diseases such as dengue and malaria.<br />

Beyond the treatment or cure, Sanofi<br />

takes action in the field alongside its<br />

partners, working with local stakeholders<br />

to help individuals protect themselves<br />

against these diseases, including by increasing<br />

awareness.<br />

Launching a new vaccine to combat<br />

dengue<br />

Dengue is a viral disease transmitted to<br />

humans by mosquitoes, mainly in the<br />

intertropical zone (Southeast Asia, Indian<br />

Ocean, South Pacific, Latin America,<br />

West Indies). WHO estimates 50 million<br />

cases annually, including 500,000 cases<br />

of dengue hemorrhagic fever, which is<br />

fatal in 20 percent of cases. There are 2.5<br />

billion people who live in at-risk areas.<br />

Climate change may extend the transmission<br />

season and alter the geographical<br />

distribution of dengue, particularly due<br />

to weather variations (increased temperatures<br />

or tropical rains). This could lead to:<br />

• increased number of mosquitoes as environmental<br />

conditions become more<br />

favorable; for example, it was recently<br />

demonstrated that high temperatures<br />

during El Niño periods were associated<br />

with dengue epidemics in Asia;<br />

• the expansion of the vectors and virus<br />

to previously unaffected areas (e.g.,<br />

in temperate regions such as North<br />

America and Europe);<br />

• shorter incubation of the virus in the<br />

vector, leading to more explosive outbreaks;<br />

• changes in vector biology and biting<br />

habits, facilitating increased transmission;<br />

and<br />

• changes in human behavior, in response<br />

to climate change, that place<br />

them at elevated risk of dengue.<br />

After 20 years of research and development,<br />

Sanofi Pasteur launched the first<br />

dengue vaccine. On December 9, 2015,<br />

Mexico was the first country to grant<br />

marketing authorization to Dengvaxia®,<br />

our tetravalent vaccine for the prevention<br />

of diseases caused by all four dengue<br />

virus serotypes in preadolescents,<br />

adolescents, and adults (aged 9 to 45)<br />

living in endemic areas. The marketing<br />

authorization of Dengvaxia® in Mexico<br />

was followed by approvals in the Philippines<br />

and Brazil in 2015 and El Salvador<br />

in <strong>2016</strong>.<br />

We are introducing Dengvaxia® first in<br />

these countries where the vaccine has<br />

the greatest potential to reduce dengue<br />

burden globally and help achieve the<br />

WHO’s goal of reducing dengue mortality<br />

by 50 percent and morbidity by<br />

25 percent by 2020 in endemic countries.<br />

Regulatory review processes for<br />

Dengvaxia® continue in other endemic<br />

countries, and Sanofi Pasteur remains<br />

committed to introducing the vaccine<br />

first in countries where the disease is a<br />

major public health priority.<br />

Our integrated approach to fight<br />

malaria<br />

Malaria is one of the most deadly infectious<br />

diseases in the world. According to<br />

WHO estimates, there were 214 million<br />

cases and 438,000 deaths from malaria<br />

in 2015, mostly among African children.<br />

In Africa, a child dies of malaria almost<br />

every minute.<br />

Heavy rains and high humidity are<br />

identified as important factors for the<br />

reproduction and survival of infected<br />

mosquitoes responsible for transmitting<br />

the disease. Climate strongly influences<br />

the conditions for transmission of the<br />

disease. In warmer weather, mosquitoes<br />

carrying the parasites responsible for<br />

the disease multiply and quickly develop<br />

their infectious capacity. Africa<br />

and South America are especially at risk.<br />

Sanofi promotes access to treatment at affordable<br />

prices in the areas most affected<br />

by malaria. In 2007, Sanofi developed<br />

Artesunate Amodiaquine Winthrop<br />

(ASAQ Winthrop®), one of the leading<br />

malarial drugs, under a public-private<br />

partnership with DNDi. Distributed at<br />

tiered prices in 34 countries, particularly<br />

in Africa, more than 400 million doses<br />

have been produced since 2007. Sanofi did<br />

not seek patent protection for that drug.<br />

We have also partnered with Medicines<br />

for Malaria Venture to develop new therapies<br />

to prevent the risk of resistance to<br />

existing treatment in Southeast Asia and<br />

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the risk of expansion in Africa. Beyond<br />

medicines, Sanofi is strongly committed<br />

to awareness, education, and prevention<br />

programs with local communities. The<br />

“Schoolchildren against Malaria” program<br />

provides educational tools to help teachers<br />

educate children in Africa. Nearly<br />

8 million children in 15 African countries<br />

have been sensitized to the fight against<br />

malaria. We collaborate with National<br />

Malaria Control Programs and local NGOs<br />

in a program to train educators, mainly<br />

about how to manage malaria. Finally,<br />

Sanofi is part of a collective process to<br />

develop knowledge about malaria and its<br />

treatment. We share data from clinical<br />

studies conducted with the Liverpool<br />

School of Tropical Medicine, and we<br />

develop means of surveillance in the<br />

countries most affected by the disease,<br />

in partnership with National Malaria<br />

Control Programs and DNDi.<br />

Tackling climate-sensitive neglected<br />

tropical diseases<br />

As pointed out by WHO, the risk factors<br />

around leishmaniasis include poverty,<br />

malnutrition, and population mobility<br />

but also climate change, as changes in<br />

rainfall, temperature, and humidity are<br />

factors that may impact the epidemiology<br />

of the disease. Sanofi provides glucantime,<br />

a treatment on the WHO List<br />

of Essential medicines, at a preferential<br />

price. In October 2015, Sanofi and the<br />

Institut Pasteur de Tunis signed a partnership<br />

agreement to launch a program<br />

aimed at combating cutaneous leishmaniasis<br />

in the school environment. This<br />

awareness-raising program is centered<br />

on the distribution of 70,000 comics<br />

(available in both French and Arabic)<br />

to schoolchildren in seven governorates<br />

where leishmaniasis is endemic. The<br />

program was launched in March <strong>2016</strong>.<br />

Asthma and allergies<br />

Allergies are common and some are climate-sensitive.<br />

Warmer conditions generally<br />

favor the production and release<br />

of airborne allergies and, consequently,<br />

there may be an effect on asthma and<br />

other respiratory diseases. In May 2015,<br />

Sanofi and Regeneron announced positive<br />

pivotal phase 2b dupilumab data in<br />

adult patients with moderate-to-severe<br />

asthma who are uncontrolled despite<br />

treatment with inhaled corticosteroids<br />

and long-acting beta agonists. The companies<br />

also announced the initiation of<br />

a phase III clinical trial of dupilumab in<br />

patients with uncontrolled persistent<br />

asthma.<br />

Continuing our efforts in mitigating<br />

climate change<br />

We also fully recognize our responsibility<br />

to mitigate climate change and are<br />

actively seeking to develop innovative<br />

solutions to mitigate our impact on<br />

the environment. By taking concrete<br />

and scalable actions to mitigate climate<br />

change, we are contributing to immediate<br />

public health and economic cobenefits<br />

for the communities where we<br />

operate while reducing our impact on<br />

the climate. Through partnerships with<br />

energy providers, infrastructure developers,<br />

and research bodies, we aim to<br />

develop groundbreaking solutions that<br />

will have positive impacts on the health<br />

of the planet and people. For instance, we<br />

have installed a natural gas connection<br />

at our Swiftwater site in Pennsylvania.<br />

The project consisted of piping natural<br />

gas to the site and converting existing<br />

boilers to burn natural gas. The expected<br />

impact of using natural gas instead of<br />

light fuel oil represents an annual decrease<br />

in CO 2<br />

emissions amounting to<br />

10,000 tons / year at this site alone. Moreover,<br />

we decreased our CO 2<br />

emissions by<br />

24 percent between 2010 and 2015<br />

by using maritime transport. Today,<br />

86 percent of our international shipments<br />

are sent by sea. In 2015, we reduced<br />

our CO 2<br />

emissions by 15.8 percent<br />

compared to 2010 (scopes 1 and 2).<br />

The future<br />

Sanofi will continue to commit to tackling<br />

climate-sensitive diseases, for which<br />

we have a strong expertise. We will endeavor<br />

to offer adapted solutions for<br />

these diseases that may be impacted by<br />

climate change.<br />

According to WHO, climate change may<br />

have had a role in the spread of the Zika<br />

virus. In February <strong>2016</strong>, we announced<br />

that – building on our successful history<br />

in developing vaccines against similar viruses,<br />

including dengue – we are launching<br />

a vaccine research and development<br />

project targeting the prevention of infections<br />

and diseases related to the Zika virus.<br />

We will also assess any opportunities to<br />

work with partners to promote awareness<br />

about the impacts of climate change<br />

on health, as collaborative efforts are<br />

needed to tackle what The Lancet calls<br />

“the biggest global health threat of the<br />

21st century.”<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 99


GOOD PRACTICE SECTION 2: WORK | INNOVATION | CLIMATE<br />

The size of the SDG icons reflects the quantity of appearance in this section.<br />

HUMAN RIGHTS<br />

LABOUR STANDARDS<br />

ENVIRONMENT<br />

ANTI-CORRUPTION<br />

SUSTAINABLE<br />

DEVELOPMENT<br />

G O A L S<br />

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GOOD PRACTICE<br />

IneqUAlITIeS | eDUCATIon | PARTneRSHIP<br />

72<br />

74<br />

76<br />

78<br />

82<br />

84<br />

86<br />

88<br />

90<br />

94<br />

96<br />

Adecco<br />

Banca Popolare di Sondrio<br />

Bosch<br />

Deutsche Post DHl Group<br />

Deutsche Telekom<br />

Green Delta Insurance<br />

Manila Doctors Hospital<br />

Merck<br />

Philip Morris <strong>International</strong><br />

Sakhalin energy<br />

Sanofi<br />

woRK | InnoVATIon | ClIMATe<br />

102<br />

104<br />

106<br />

108<br />

110<br />

112<br />

114<br />

116<br />

118<br />

120<br />

122<br />

126<br />

128<br />

130<br />

132<br />

134<br />

136<br />

138<br />

Acciona<br />

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

Armacell<br />

Audi<br />

BASf<br />

Bayer<br />

Commerzbank<br />

Consolidated Contractors Company<br />

eDf Group<br />

HoCHTIef<br />

MAn<br />

mcs<br />

MTU Aero engines<br />

nestlé<br />

Postnl<br />

RoMRADIAToARe<br />

SkyPower<br />

Vaisala<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 101


2010 – 2015<br />

ACCIONA’S ACHIEVEMENTS<br />

ON ITS FIRST SUSTAINABILITY<br />

MASTER PLAN<br />

Six years ago, with a view to the medium and long term, ACCIONA planned and structured the<br />

initiatives related to sustainability in the form of a roadmap that has helped us stand out, become<br />

more competitive, contribute to sustainable development, and consolidate our position as<br />

leaders in sustainable practices. That was ACCIONA’s first Sustainability Master Plan 2010 – 2015.<br />

By Juan Ramón Silva Ferrada, ACCIONA<br />

Since then, the company’s sustainability<br />

actions have been led and supervised<br />

by the Board of Directors through its<br />

Sustainability Committee. As a result,<br />

the company’s sustainability initiatives<br />

and objectives are discussed at its highest<br />

level of governance.<br />

Sustainability was integrated into the<br />

business areas through the creation, in<br />

2012, of Sustainability Committees in<br />

the divisions; working in cooperation<br />

with the Sustainability Department, they<br />

promote and monitor the divisions’ specific<br />

sustainability initiatives. There are<br />

committees in the Energy, Construction,<br />

Water, Service, and Industrial divisions,<br />

and meetings are held periodically to<br />

address sustainability with Real Estate<br />

and Bestinver.<br />

Additionally, matters regarding sustainability<br />

have been brought to the attention<br />

of the shareholders’ meeting. Since 2012,<br />

ACCIONA has presented its Sustainability<br />

Report for review and approval by the<br />

shareholders’ meeting, and it was one<br />

of the first companies to do so (the 2015<br />

Sustainability Report was approved with<br />

a favorable vote of 99.99 percent of those<br />

in attendance at the <strong>2016</strong> shareholders’<br />

meeting).<br />

We maintain our commitment to workplace<br />

health and safety, as reflected in<br />

the zero fatal accidents among company<br />

employees between 2012 and 2015, combined<br />

with a notable improvement in<br />

the workplace accident frequency index<br />

of 31.57 percent, as compared to 2011.<br />

A percentage of variable remuneration is<br />

linked to achievement of sustainability<br />

objectives for 97 percent of executives,<br />

90 percent of structural managers, and<br />

some of the technical and support staff.<br />

Contributions to the development of the<br />

communities where ACCIONA operates<br />

were enhanced by implementing a methodology<br />

for assessing and managing the<br />

social impact of our projects: In 2015, it<br />

was applied in 47 projects in 18 countries.<br />

In the last three years, more than 2,400<br />

corporate volunteers have contributed<br />

more than 23,000 hours of work to the<br />

community. Also, through the ACCIONA<br />

Microenergy Foundation, ACCIONA<br />

continues to provide basic electricity<br />

supply to isolated rural communities in<br />

developing countries: more than 30,000<br />

beneficiaries in Peru and Mexico.<br />

ACCIONA’s long-term values – focused<br />

particularly on our bonds with people<br />

and society – have been reinforced by the<br />

steady implementation of improvements<br />

in corporate governance, including:<br />

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Sustainability Master Plan 2010 – 2015<br />

Corporate Governance<br />

our commitment to good governance,<br />

ethics, integrity, and transparency<br />

seeks to be a benchmark of integral<br />

and responsible conduct<br />

STAKEHOLDERS<br />

establish a commitment<br />

to continuous engagement<br />

with stakeholders<br />

Innovation<br />

Technological, operational, and<br />

design innovation of projects<br />

constitute the underpinnings of<br />

competitiveness<br />

Value Circle<br />

Sustainability as a<br />

fundamental factor of<br />

our suppliers, contractors,<br />

and partners<br />

DISSEMINATION AND<br />

LEADERSHIP<br />

Publish and disseminate<br />

a business model based on<br />

sustainable development<br />

opportunities<br />

ACCOUNTABILITY<br />

Transparency<br />

includes accountability<br />

of each of our actions<br />

Environment<br />

Integration of the enviromental variable<br />

in decision-making and in business<br />

operations in order to reduce our<br />

environmental footprint<br />

People<br />

Commitment to employees in a healthy and<br />

discrimination-free environment in order to attract<br />

and retain talent with a long-term vision<br />

Society<br />

Commitment to social<br />

progress of communities in<br />

which we operate<br />

a new program to prevent crime and<br />

corruption, an exhaustive analysis of our<br />

risks in the area of human rights, and the<br />

creation of a Compliance Department.<br />

Those practices are also reflected in our<br />

Policies Book, approved by the Board’s<br />

Sustainability Committee, which reflects<br />

the financial, social, and environmental<br />

commitments and principles of action<br />

that apply to the company’s businesses.<br />

The company sought to improve supply<br />

chain performance in terms of sustainability<br />

through the approval in 2011<br />

of the Ethical Principles for Suppliers,<br />

Subcontractors, and Collaborators; the<br />

inclusion, since then, of ethics clauses<br />

in tenders, orders, and contracts; the<br />

creation of a supply chain risk map each<br />

year since 2012; an Audit Program for<br />

these activities; and training of more<br />

than 2,500 suppliers in sustainability<br />

issues through six training courses.<br />

ACCIONA avoided the emission of 85.7<br />

million tons of CO 2<br />

between 2010 and<br />

2015. Since 2010, we have reduced our<br />

direct and indirect CO 2<br />

emissions (Scopes<br />

1 & 2) by 43.1 percent.<br />

ACCIONA has measured the greenhouse<br />

gas emissions associated with the activity<br />

of its 28,000 suppliers and begun to work<br />

with them to implement joint measures<br />

to reduce their environmental footprints.<br />

Additionally, the water consumption associated<br />

with the activities of the 28,000<br />

suppliers in 75 countries was measured,<br />

and the 500 suppliers – accounting for<br />

70 percent of the supply chain’s total<br />

consumption – were identified.<br />

Our firm commitment to innovation is<br />

evidenced in the € 876 million spent in<br />

2010–2015, that is, far more than the<br />

€ 500 million earmarked in the 2015<br />

Sustainability Master Plan.<br />

Since 2012, we have saved € 86.8 million<br />

through improvements to innovation<br />

processes.<br />

ACCIONA has expanded its active presence<br />

in international organizations such<br />

as the Steering Committees of the United<br />

Nations <strong>Global</strong> <strong>Compact</strong> LEAD and Caring<br />

for Climate initiatives; the World<br />

Business Council for Sustainable Development;<br />

and the Corporate Leaders<br />

Group on Climate Change. We are cochairs<br />

of the Renewable Energy Committee<br />

of the Advisory Board for the<br />

Sustainable Energy for All initiative<br />

organized by the UN and the World Bank.<br />

We are present in the leading sustainability<br />

indices, such as the Dow Jones<br />

Sustainability World Index (for the 9th<br />

consecutive year in 2015); FTSE4Good;<br />

the CDP <strong>Global</strong> Climate Change Report<br />

2015 and CDP Climate Change Report<br />

2015 Iberia Edition; and the Carbon<br />

Disclosure Leadership Index.<br />

To conclude, the Sustainability Master<br />

Plan 2015 and the forthcoming Sustainability<br />

Master through 2020 evidence<br />

our commitment to sustainability and<br />

responsible stewardship and enhance<br />

our position as leaders in sustainable<br />

practices.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 103


AAIB – Maximizing Value<br />

Beyond Disclosure<br />

By P. Abdelghaly, M. Hasebou, and D. El Demerdash, AAIB<br />

Having reached a decade plus in sustainability and business innovation, the Arab African<br />

<strong>International</strong> Bank (AAIB) has served as a leader in Egypt and the MENA region and a trendsetter<br />

in the financial sector regarding banking and finance sustainability.<br />

AAIB’s journey toward sustainability<br />

dates back to 2003, when the bank became<br />

the first financial institution in<br />

Egypt to join the UN <strong>Global</strong> <strong>Compact</strong>,<br />

launched the AAIB undergraduate competition<br />

for banking and finance, and<br />

introduced social and environmental risk<br />

to its credit policy. In addition to publishing<br />

its report on the G4 Sustainability<br />

Guidelines of the <strong>Global</strong> Reporting Initiative<br />

(GRI), AAIB goes beyond disclosure<br />

requirements to reveal the long process<br />

of learning from experiences, exploring<br />

gap analyses, and serving as a role<br />

model for sustainable finance. The G4<br />

report is more a journey of discovery that<br />

helps organizations focus their sights on<br />

setting goals, measuring sustainability<br />

performance, and managing change<br />

in order to implement better practices.<br />

Although sustainability reporting is not<br />

yet obligatory in Egypt, AAIB has been<br />

taking proactive steps toward disclosing<br />

its sustainability practices since 2005.<br />

The reporting journey then evolved to<br />

include various reporting initiatives<br />

based on other international frameworks,<br />

guidelines, and standards, such as the<br />

United Nations <strong>Global</strong> <strong>Compact</strong>; the<br />

Equator Principles, which are customized<br />

for financial services; and the London<br />

Benchmarking Group for impact assessment.<br />

These elements help tackle AAIB’s<br />

environmental and social risk-assessment<br />

on project lending, as well as measure<br />

the business and social impacts of our<br />

annual community investments.<br />

In 2010, AAIB took its first step toward<br />

publishing its first sustainability report,<br />

which engaged all the bank’s lines of<br />

business and key functions. Followed by<br />

the Carbon Footprint Report in 2014, AAIB<br />

decided it was time for a more advanced<br />

reporting level that is more holistically<br />

inclusive of all the bank’s sustainability<br />

reports and based on the most holistic<br />

approach to reporting, namely the GRI.<br />

This decade-long experience in reporting<br />

has led to the bank’s adoption of its own<br />

reporting framework, which went beyond<br />

data collection and information disclosure<br />

to include materiality assessment of the<br />

most pressing subjects for our stakeholders,<br />

as well as a holistic stakeholder engagement<br />

– both internally as well as<br />

externally – to decide on these issues.<br />

Internal stakeholders’ engagement:<br />

Sustainability reporting workshops<br />

Educating our staff and creating awareness<br />

is a major goal in establishing a<br />

strong foundation for embracing sustainability<br />

in banking operations as well as<br />

developing sustainability into a collective<br />

effort.<br />

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For measuring the key performance<br />

indicators in the GRI report, the bank<br />

conducted a series of sessions and workshops<br />

for the employees to create awareness<br />

on different levels among juniors<br />

and liaison officers, first-line managers,<br />

senior managers, and top management.<br />

Although the most common approach in<br />

endorsing the culture of sustainability<br />

in the organization is the top-down approach,<br />

AAIB introduced sustainability<br />

awareness horizontally and vertically to<br />

achieve the highest impact and transmit<br />

the sustainability gene from one generation<br />

to the next.<br />

The internal awareness process took<br />

place for five consecutive days for 97<br />

employees in order to educate different<br />

lines of business across all managerial<br />

levels about sustainability and reporting.<br />

External stakeholders engagement:<br />

The Partners Club<br />

Sustainability awareness extends beyond<br />

the internal culture of AAIB and<br />

reaches the bank’s external stakeholders,<br />

such as clients, subsidiaries, government,<br />

brokers, fund managers, as well as insurance<br />

and financial advisors. The external<br />

stakeholders were selected based on their<br />

high influence on AAIB, as well as the<br />

reliance of AAIB on these stakeholders<br />

in day-to-day operations and long-term<br />

business relations. The Partners Club<br />

saw the attendance of 97 influential<br />

stakeholders in AAIB that represented<br />

the bank’s corporate clients, subsidiaries,<br />

advertising agencies and suppliers, printing<br />

houses, business partners, investors,<br />

and consultants.<br />

AAIB’s Partners Club is aimed at:<br />

• external stakeholder engagement<br />

• establishing stakeholder relations and<br />

networking<br />

• creating awareness on sustainability<br />

matters and issues<br />

Building a sustainability strategy is a<br />

way to develop a more structured and<br />

coherent sustainability approach that<br />

demonstrates commitment – not only<br />

to AAIB’s shareholders, but also to the<br />

community and the environment. As CSR<br />

and sustainability are about value creation,<br />

AAIB has developed a framework<br />

and approach that follows the bank’s<br />

spheres of influence, including core business<br />

operations, voluntary contributions,<br />

and policy advocacy.<br />

Moving forward, the GRI assessment<br />

and organization’s screening directed<br />

the top management toward establishing<br />

strong levels of support from top<br />

leadership to promote the concept of sustainable<br />

finance over the coming years.<br />

Accordingly, <strong>2016</strong> witnessed the launch<br />

of the second phase of the MOSTADAM<br />

platform for promoting sustainable finance<br />

in Egypt and the MENA region.<br />

MOSTADAM collaborated strategically<br />

with the Frankfurt School of Finance<br />

and Management in Germany to certify<br />

experts in small and medium enterprises<br />

as well as climate and renewable energy.<br />

The platform registered candidates from<br />

Egypt, Somaliland, and the Netherlands.<br />

AAIB aims at creating an industry movement<br />

in Egypt and the MENA region by<br />

introducing new sustainable products<br />

and services, preparing expertise, and<br />

supporting a sustainable business model.<br />

Post-assessment goals and objectives:<br />

• lead and create a forum for sustainable<br />

finance globally<br />

• embrace sustainability in core banking<br />

operations and branding<br />

• educate financial institutions in Egypt<br />

about sustainable finance<br />

• develop comprehensive models for<br />

sustainable finance<br />

• exchange best practices and successful<br />

role models globally<br />

AAIB has established a solid foundation<br />

with regard to sustainability. The<br />

bank is still on its way to reaching an<br />

“advanced” level of sustainability behavior.<br />

AAIB has had success in engaging<br />

the work environment and generating<br />

strong commitments about responsible<br />

business operations. The overall<br />

performance reflects AAIB’s vision for<br />

sustainability.<br />

AAIB’s sustainability<br />

decade and milestones<br />

AAIB was the first bank in Egypt’s<br />

financial sector to accomplish the<br />

following:<br />

2003 – 2010: Launches AAIB Award<br />

– annual banking competition for<br />

university undergraduates<br />

2005: Joins the UN <strong>Global</strong> <strong>Compact</strong><br />

2007: Joins the LBG to measure<br />

community investments<br />

2007: Establishes the first independent<br />

foundation for social development<br />

in health and education:<br />

We Owe It to Egypt foundation<br />

2009: Joins the Equator Principles<br />

for environmental and social<br />

risk-assessment in project lending<br />

2010: First to release a sustainability<br />

report within the banking sector in<br />

Egypt<br />

2013: Launches the First Platform<br />

for Promoting Sustainable Finance in<br />

Egypt and MENA region within the<br />

banking sector<br />

2014: Launches the first certified<br />

module on sustainable finance to<br />

12 banks in Egypt; certified by EBI<br />

<strong>2016</strong>: Launches the first certified<br />

training modules for banking<br />

executives on renewable energy<br />

and climate change finance, and<br />

SME finance<br />

<strong>2016</strong>: AAIB publishes its second<br />

sustainability report based on GRI G4<br />

Regional and international<br />

recognition:<br />

2010: CSR Arabia Network Regional<br />

Awards, Dubai<br />

2011 – 2015: Good Practice in<br />

UNGC <strong>Yearbook</strong><br />

2015: CSR Golden Shield, Dubai<br />

2015: Best Green Bank Award by CFI<br />

<strong>2016</strong>: AAIB awarded by Euromoney as<br />

"Best CSR in the Middle East," Dubai<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 105


Armacell sets new<br />

standards for the<br />

insulation industry<br />

Armacell is setting new standards for the FEF technical insulation industry and defining the role<br />

of Environmental Product Declarations for the insulation market and for safe and energy-efficient<br />

green buildings.<br />

By Diana Negrea, Armacell<br />

Armacell is the first manufacturer of<br />

elastomeric insulation materials (flexible<br />

elastomeric foam, FEF) to present<br />

Environmental Product Declarations<br />

(EPDs) based on an independent lifecycle<br />

assessment (LCA). EPDs are internationally<br />

accepted ISO Type-III ecolabels that<br />

disclose the environmental performance<br />

of products based on the LCA method.<br />

Unlike other environmental labels that<br />

signify “green” performance, an EPD<br />

discloses the full story of a product’s<br />

direct environmental impact.<br />

Armacell has yet again raised the standards<br />

of the FEF technical insulation<br />

industry while sending a clear message<br />

to the market:<br />

» With the Environmental Product Declarations, we create a unique<br />

degree of transparency for our Armaflex® products. We provide architects,<br />

specifiers, and those inviting tenders with reliable information<br />

for designing sustainable building projects. At the same time, we commit<br />

ourselves to continuing to improve the environmental friendliness<br />

of our products, thus sharpening our competitive edge. «<br />

Patrick Mathieu, President and CEO of Armacell<br />

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Environmental Product<br />

Declarations are based on<br />

independent lifecycle assessments<br />

EPDs rely on LCAs, which provide systematic<br />

and standardized data for an<br />

ecological assessment of a building in<br />

the “modular construction system.” In<br />

an LCA, the entire life of the building,<br />

the building phase with possible conversions,<br />

as well as demolition and disposal<br />

are taken into consideration.<br />

Armacell received support in the analysis<br />

of several thousand datasets from PE <strong>International</strong><br />

(now thinkstep), which is the<br />

market leader in strategic eco-consulting,<br />

software solutions, and comprehensive<br />

services in the field of sustainability.<br />

Comparing the primary energy input<br />

identified in Armacell’s product LCAs<br />

with the energy savings achieved, it<br />

shows that using Armaflex insulation<br />

materials saves about 140 times more<br />

energy than is needed for their manufacture,<br />

transport, and disposal. The<br />

energy input needed to manufacture<br />

Armaflex pays off in just 50 days.<br />

As an LCA can only provide very specific<br />

information about an individual manufacturer’s<br />

products, the results cannot<br />

simply be transferred to the products of<br />

other FEF manufacturers. Deviations in<br />

the raw materials used or the production<br />

process, as well as the very different<br />

manufacturing footprints of the providers,<br />

have a significant impact on the data.<br />

Environmental Product Declarations<br />

serve as a “sustainability passport”<br />

for insulation materials<br />

The construction industry has huge potential<br />

for improving energy efficiency<br />

and reducing greenhouse gas impacts<br />

through innovative products and solutions.<br />

One of the most significant opportunities<br />

in this area is in high-tech<br />

insulation products. Optimal technical<br />

insulation is the simplest, fastest, and<br />

most cost-effective measure for improving<br />

energy efficiency in industrial, commercial,<br />

and residential infrastructures.<br />

Armacell’s EPDs, certified by the Institute<br />

for Construction and Environment<br />

(IBU) in Europe and the Underwriters<br />

Laboratories in Asia, not only make<br />

statements about the primary energy<br />

requirements but also contain information<br />

about the extent to which the<br />

products contribute to the greenhouse<br />

effect, acidification, over-fertilization,<br />

depletion of the ozone layer, and smog.<br />

With this unprecedented transparency<br />

for the FEF technical insulation market,<br />

the EPDs serve as a “sustainability<br />

passport” for insulation materials and<br />

ensure that green buildings are designed<br />

in accordance with the following certification<br />

schemes: Leadership in Energy<br />

and Environmental Design (LEED®);<br />

the Building Research Establishment<br />

Environmental Assessment Methodology<br />

(BREEAM); the French<br />

certification HQE, which is<br />

awarded to building construction<br />

and management; and the<br />

German Sustainable Building<br />

Council (DGNB). With this initiative,<br />

Armacell is supporting<br />

the development of green<br />

city-building and encouraging<br />

responsible construction in the<br />

21st century.<br />

The role of Environmental Product<br />

Declarations for the insulation<br />

market<br />

Demand for EPDs is growing in response to<br />

changes in green building guidelines and<br />

design practices. The US Green Building<br />

Council’s LEED® green building program<br />

is now placing emphasis on lifecycle-based<br />

environmental reporting and transparency,<br />

rewarding points for use of products<br />

with EPDs and LCAs as part of the Material<br />

and Resources Credits. The top 10<br />

countries outside of the United States for<br />

LEED-certified green buildings that made<br />

the list for 2015 are geographically and<br />

culturally diverse, representing seven of<br />

the world’s twenty largest economies by<br />

gross domestic product: China, Germany,<br />

Brazil, India, Canada, South Korea, and<br />

Turkey. Although Canada tops the list,<br />

Brazil and the Republic of Korea have<br />

moved up in the rankings, and Turkey and<br />

Sweden are new to the top 10 this year.<br />

EPDs are suitable as proof of environmental<br />

claims in the public procurement<br />

arena and offer the relevant data<br />

on environmental properties of a product<br />

for sales and marketing purposes.<br />

They include statements on the use of<br />

energy and resources and the extent<br />

to which a product contributes to the<br />

greenhouse effect, acidification, eutrophication,<br />

destruction of the ozone<br />

layer, and smog formation. In addition,<br />

End of life<br />

Use<br />

Transport<br />

Raw<br />

materials<br />

Manufacturing<br />

details are given about the technical<br />

properties, which are required for assessing<br />

the performance of the building<br />

products in the building, such as<br />

durability, heat and sound insulation,<br />

or the influence on the quality of the<br />

indoor air.<br />

The ISO Type-III EFDs for insulation<br />

products are directed at many target<br />

groups with regard to these qualitative<br />

statements about the environmental<br />

performance of building products: planners,<br />

architects, building companies,<br />

real estate companies, facility managers,<br />

and, of course, the companies that are<br />

involved in manufacturing and serving<br />

the supply chain – from raw materials<br />

to the building itself.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 107


Faster, More Efficient,<br />

More Sustainable –<br />

The Production Plant of<br />

the Future<br />

By Prof. Dr.-Ing. Peter F. Tropschuh and Jasmin Lotze, Audi AG<br />

Digital integration will play a central role in the modern production plant over the next few years:<br />

The “factory of the future” – also known as Industry 4.0 or the Smart Factory – not only increases<br />

the ability of machines to control processes faster and more efficiently; it also results in greater<br />

integration of machinery and humans.<br />

Following on from mechanization, electrification,<br />

and automation, the Smart<br />

Factory denotes what now represents<br />

the fourth industrial revolution that<br />

industry will be facing over the coming<br />

years. The goal of the Smart Factory is<br />

to increase productivity and flexibility<br />

while at the same time realizing ecological<br />

benefits by reducing the level of<br />

resources consumed.<br />

The driving force behind this development<br />

is the steady inroads made by<br />

worldwide integration. Today’s internet<br />

continues to evolve into an “internet of<br />

things,” over which not only people, but<br />

also machinery (= things) can exchange<br />

information. The real and virtual worlds<br />

are thus increasingly converging. The<br />

Smart Factory symbolizes this process.<br />

Because all workers, machinery, and resources<br />

are interconnected non-centrally<br />

there, they are able to communicate<br />

with each other in real time. That is how<br />

the factory is able to assist the workers.<br />

Various elements and technologies of<br />

the Smart Factory are already in use at<br />

Audi. The much-lauded revolution is<br />

therefore more a case of an evolution<br />

for Audi production.<br />

Future scenario: Islands of expertise<br />

instead of assembly line<br />

Intelligent systems, innovative technologies,<br />

efficient structures: time to rethink<br />

the topic from the ground up. Small<br />

groups of forward thinkers in Ingolstadt<br />

gather ideas for the Smart Factory beyond<br />

2030. The creative teams work on solutions,<br />

free from the current processes in<br />

production. Instead of today’s practice<br />

of high-volume production at a small<br />

number of plants, in the future production<br />

facilities could be built wherever<br />

the demand is high – in other words,<br />

close to the customer. Every production<br />

unit would therefore need to be able to<br />

build every model according to the same<br />

principles and using the same flexible<br />

tools – a complete rethink of the working<br />

approach in automotive manufacturing.<br />

Here, too, the future is connected,<br />

integrated, and communicative.<br />

The role of the workers<br />

For all the focus on the technology, people<br />

will not disappear from the production<br />

plant of the future. Quite the opposite:<br />

The large number of production<br />

variants, the high degree of customization,<br />

and the high-quality standards<br />

can only be realized with suitably wellqualified<br />

workers. But wherever possible,<br />

they are supported by assisting robots.<br />

Ergonomics and reduced workloads are<br />

the overriding priorities; the workers<br />

will increasingly take on planning and<br />

controlling roles, because in 2035 skilled<br />

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workers will be in demand and coveted.<br />

Identifying problems and indicating<br />

them to the workers – the rectification<br />

process, for example – will also proceed<br />

much faster thanks to integrated diagnostics<br />

systems.<br />

Clearly, however, the standards involved<br />

in working in the production plant of the<br />

future will rise. The workers are therefore<br />

supported by elaborate information<br />

systems because the extreme variations<br />

in products has resulted in a very large<br />

scope of tasks. At the interfaces between<br />

electronic and mechanical systems, for<br />

example, software experts ensure that<br />

sensors are set and functioning optimally.<br />

Network architects ensure that machines<br />

and workers can communicate. So the<br />

high levels of technology and integration<br />

already require one thing above all: the<br />

adequate qualification and advancement<br />

of the workers.<br />

New robots facilitate work<br />

In the production plant of the future,<br />

robots can support the workers in many<br />

different ways. For example, machines<br />

can supply them with important information<br />

as needed, or step in to perform<br />

non-value-adding activities. The division<br />

of labor runs along the same principles<br />

as in the operating room: prepare – pass<br />

on – operate.<br />

the workers of the need to do physically<br />

strenuous tasks. Audi’s goal is to make<br />

every workstation as ergonomic as possible.<br />

Assembly Technology Development,<br />

for example, is working on increasingly<br />

transferring burdensome tasks from<br />

workers to robots. This aspect is especially<br />

relevant in production, because<br />

that is where most physical effort is<br />

required, and demographic change is<br />

forcing through fresh solutions.<br />

Beyond the confines of the plant –<br />

globally integrated<br />

Digitalization is making inroads not just<br />

within a production location, but across<br />

the entire global production chain. The<br />

Audi Group currently builds vehicles at<br />

17 locations in 13 countries. The new<br />

plant in Mexico was added in <strong>2016</strong>. More<br />

than 85,000 employees throughout the<br />

Group work simultaneously on creating<br />

high-quality products all over the world.<br />

To do this, a huge amount of data needs<br />

to be shared between the plants because<br />

they are all interconnected non-centrally.<br />

Networking this working data intelligently<br />

and processing it in real time<br />

are therefore major priorities. The key<br />

thing is to send and evaluate enormous<br />

data flows quickly and at high speed.<br />

Data security is obviously hugely important<br />

for this “big data”: As early as<br />

the research phase, the company uses<br />

recognized and tested embedded security<br />

mechanisms and standards. To enable<br />

smooth communication, international<br />

standards must also be clarified.<br />

Ideas from our own ranks<br />

Preparing the way to the Smart Factory<br />

of the future is not merely the task of<br />

designated experts in creative teams. Ever<br />

since 1969, each individual employee<br />

at Audi has had the opportunity to put<br />

forward their own ideas; in 1994 this<br />

suggestions scheme gave birth to the<br />

Audi Ideas Program. The large number<br />

of innovative suggestions has resulted<br />

in both minor and far-reaching process<br />

improvements, all of which save<br />

costs. Since the program was introduced,<br />

AUDI AG has realized savings in the order<br />

of € 780 million. Audi examines the<br />

benefits and feasibility of every idea submitted<br />

with a view to raising efficiency<br />

or improving the working environment.<br />

It is quite common for them even to<br />

result in successful patents, such as the<br />

helical-thread mold.<br />

For the past two years, smaller robots<br />

operating according to this principle<br />

have been in action on the Audi assembly<br />

line without any safety fence. The<br />

work that these new “colleagues” do is<br />

often relatively simple, but they relieve<br />

Left: Efficient and kind on the back:<br />

The robot offers the container at the very<br />

moment the worker needs it.<br />

Right: A highly efficient factory:<br />

The Audi A3 body shop with innovative<br />

technologies and cutting-edge equipment.<br />

Efficiency and sustainability were the priorities<br />

when planning the production hall.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 109


Stakeholder Relations –<br />

Invest in Them Before You<br />

Need to Rely on Them<br />

By Nadine-Lan Hönighaus and<br />

Thorsten Pinkepank, BASF SE<br />

Why engage your stakeholders?<br />

As the world’s leading chemical company,<br />

BASF has products in all kinds of<br />

industries. It employs approximately<br />

112,000 people globally, services numerous<br />

suppliers and customers, and has<br />

relationships with shareholders and a<br />

large number of societal stakeholders.<br />

Having a clear picture of a company’s<br />

relevant stakeholders in business, government,<br />

and civil society is essential<br />

for effective stakeholder engagement.<br />

However, a company’s set of relevant<br />

stakeholders will change with time. In<br />

order to ensure an ongoing stakeholder<br />

engagement, it is appropriate to have<br />

skilled people and organizational structures<br />

in place.<br />

BASF has always interacted with its stakeholders,<br />

but in addition to rather “classical”<br />

forms of stakeholder interaction,<br />

which are still essential, new approaches<br />

have been developed. Engagement with<br />

stakeholders can improve a company’s<br />

decision-making and performance, since<br />

it helps in acquiring a broader view of<br />

the market than what economic figures<br />

alone can provide. Stakeholders can offer<br />

a company insight into their perspectives<br />

on current and emerging issues, into how<br />

they perceive the company, and what<br />

they consider to be the company’s impact.<br />

This does not mean delegating decisionmaking<br />

to external people; it is still a<br />

company’s management that decides<br />

on its business strategy. However, this<br />

strategy has a higher likelihood of meeting<br />

the market’s needs if it is based on a<br />

participatory approach that also includes<br />

stakeholders’ views.<br />

BASF has given a clear answer as to the<br />

“why”: We have identified “responsible<br />

relations” as being one of the material<br />

aspects of our organization.<br />

Different forms of stakeholder<br />

engagement at BASF<br />

BASF has various forms of stakeholder<br />

engagement in place. Our stakeholder<br />

engagement comprises of onsite and local<br />

community-related forums, such as<br />

our community advisory panels at sites<br />

worldwide. On the business side, BASF is<br />

A fixed component of our sustainability<br />

management is the continuous exchange<br />

with our stakeholders.<br />

a founding member of Together for Sustainability,<br />

an initiative in which leading<br />

chemical companies have joined forces<br />

to support sustainability in the supply<br />

chain and standardize supplier assessment<br />

methods. On an international level,<br />

BASF takes an active part in the United<br />

Nations <strong>Global</strong> <strong>Compact</strong>: BASF’s Chairman<br />

of the Board of Executive Directors<br />

is a member of the UN <strong>Global</strong> <strong>Compact</strong><br />

Board, and BASF is an active member in<br />

many local networks. Different formats<br />

of stakeholder engagement serve different<br />

purposes: With local initiatives, you are<br />

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close to the communities adjacent to your<br />

sites; international initiatives such as the<br />

UN <strong>Global</strong> <strong>Compact</strong> can give you a broader<br />

view on the world’s material topics and<br />

the company’s possible impact on them.<br />

In 2013, in order to involve our stakeholders<br />

more intensively, BASF established<br />

the independent Stakeholder Advisory<br />

Council (SAC). The SAC consists of various<br />

renowned thinkers and leaders whose<br />

knowledge on material sustainability<br />

topics bring an important external perspective<br />

to the table in discussions with<br />

BASF’s Board of Executive Directors. The<br />

SAC meets annually with BASF’s Board<br />

of Executive Directors to offer critical<br />

evaluations and refine the sustainability<br />

management of BASF on the basis<br />

of a shared dialogue. The meetings are<br />

chaired by BASF’s Chairman of the Board.<br />

Based on recommendations of the SAC,<br />

we continuously review and update our<br />

sustainability approach and positioning.<br />

BASF has been cooperating with the European<br />

Water Partnership (EWP) since 2008,<br />

an independent organization founded<br />

through the initiative of the European<br />

Commission in 2006. Working as partners,<br />

water experts from BASF as well as<br />

other representatives from industry, governments,<br />

and NGOs developed the European<br />

Water Stewardship (EWS) standard.<br />

It enables companies from various sectors<br />

as well as agricultural operations<br />

to examine how sustainably they use<br />

water resources. The partnership with<br />

EWP highlights that a multistakeholder<br />

group can really achieve results beyond<br />

what is possible for a single institution.<br />

The EWS standard fulfills high-quality<br />

expectations, is widely accepted, and<br />

is thus a real tool for improving water<br />

management within the industry. BASF<br />

has set itself the goal of introducing<br />

sustainable water management at its<br />

production sites in water stress areas by<br />

2020 on the basis of the EWS standard.<br />

Success factors for effective and<br />

stakeholder engagement<br />

In our experience, several factors contribute<br />

to successful stakeholder engagement.<br />

• The issue taken up with stakeholders<br />

should be relevant and pressing, and it<br />

should be addressed at the right time.<br />

• Furthermore, getting the right stakeholders<br />

to the table and identifying<br />

them is not an easy task.<br />

• Depending on the subject and stakeholders,<br />

the right form of engagement<br />

should be chosen.<br />

• Enough time and resources should be<br />

put into thorough preparation of any<br />

kind of activity.<br />

Internal preparation also needs to address<br />

the mindset of participating management.<br />

Interacting with some of the stakeholders<br />

will possibly require managers to step out<br />

of their comfort zones and collaborate<br />

with individuals and types of organizations<br />

they might not be familiar with. In<br />

terms of time and research efforts, the<br />

resources needed are often underestimated,<br />

but investments must be made.<br />

Two thoughts on the evolution of<br />

stakeholder engagement<br />

Everyone agrees that solid stakeholder<br />

relations help a company to ensure its<br />

license to operate: They help to mitigate<br />

risks and retain and win customers and<br />

employees, including supporting solid<br />

public relations. This is a major motivation<br />

for stakeholder relations.<br />

Openness and a constant exchange with<br />

colleagues, customers, suppliers, shareholders,<br />

as well as experts from science,<br />

economy, politics, and the media are<br />

particularly important for us.<br />

Considering the growing complexity of<br />

the world we operate in – the “communication<br />

revolution” illustrated with key<br />

words such as social media and big data –<br />

and with regard to a growing societal<br />

skepticism toward new technologies, we<br />

will talk about the license to innovate.<br />

This is especially crucial, as innovations<br />

are key to providing solutions for the<br />

various challenges to ensure (more) sustainable<br />

development.<br />

A second factor we see concerning the<br />

evolution of stakeholder engagement<br />

is the trend of operationalizing and<br />

measuring by metrics. We elaborated<br />

on a number of success factors, and<br />

you need to be prepared for general<br />

discussions on the quantification of the<br />

benefits of stakeholder engagement. But<br />

how do you measure success or impact<br />

on value? More precisely: How do you<br />

measure how hard a crisis – maybe<br />

reputation-wise – has affected you if<br />

you have not communicated with your<br />

stakeholders for years?<br />

There are some approaches for assessing<br />

the value of stakeholder relations, but<br />

still there is no simple “metric answer”<br />

in sight – and a simple answer might<br />

not even be helpful. Not everything that<br />

counts can be counted.<br />

More information is available at www.basf.com/<br />

en/company/sustainability/environment/water/<br />

water-stewardship.html and www.ewp.eu<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 111


Smartening Up Tomorrow’s<br />

Agriculture<br />

Food security ranks among the pressing challenges of a steadily increasing global population.<br />

Yet, there is not enough land left on Earth for further agricultural development. Creating an<br />

environment that promotes sustainable agriculture is critical to Bayer in providing enough food<br />

for ourselves and also our livestock well into the future. Bayer is contributing to counter these<br />

challenges, among other things, with the innovative approach of Digital Farming. This business<br />

model is part of Bayer’s contribution to support UN Sustainable Development Goal 2: “End<br />

hunger, achieve food security and improved nutrition, and promote sustainable agriculture”<br />

and emphasizes our commitment to the UN <strong>Global</strong> <strong>Compact</strong>.<br />

By Tobias Menne, Bayer<br />

The situation is alarming: UN studies<br />

predict that the world’s population will<br />

grow to more than nine billion by 2050.<br />

One consequence is that the demand<br />

on global food systems will intensify.<br />

Although the world’s population is growing<br />

constantly, the available farmland<br />

cannot be continually expanded to accommodate<br />

it. Therefore, each farmer<br />

will have to produce more on the same<br />

amount of land. In order to accomplish<br />

this, the use of agricultural inputs such<br />

as seeds, fertilizers, and crop protection<br />

products must be chosen as precisely<br />

as possible to ensure sustainable food<br />

production into the future. For Bayer,<br />

digital innovation is one key to further<br />

increase production through efficiency<br />

while using the planet’s resources in an<br />

ever more efficient and sustainable way.<br />

This will help to enable increased yields<br />

while considering the environmental<br />

footprint of agriculture at the same time.<br />

Rather than add to the complexity, it<br />

will make the world of farming a more<br />

predictable place, empowering farmers<br />

to do what they do best – now and in<br />

the future.<br />

Harvesting the benefits of Digital Farming<br />

Sources: IBM Research, CEMA, FAO<br />

“We need new ideas and have to better<br />

cultivate the existing land to produce<br />

significantly more food on a limited<br />

agricultural area – in a sustainable<br />

and environmentally friendly manner.<br />

Because our planet is at its ecological<br />

limits,” says Liam Condon, Member of<br />

the Board of Management of Bayer AG<br />

and Head of the Crop Science Division.<br />

Digitalization of agriculture<br />

Arable land can vary considerably, even<br />

within one and the same parcel of land,<br />

depending on the topography, type of soil,<br />

and the soil-related supply of water and<br />

nutrients to the plants – all of which<br />

have repercussions for their biomass.<br />

Digital Farming – the next evolution of<br />

the digitalization of agriculture – will in<br />

the future be able to deliver hyper-local<br />

and field-specific information in order<br />

to spark quick and intelligent action on<br />

the field. Bayer currently offers large and<br />

small-scale farmers throughout the world<br />

a variety of digital decision support-tools,<br />

such as: the so-called Expert tool, which<br />

provides farmers with analysis of the<br />

infection process of fungal diseases, the<br />

development and migration of pests, and<br />

storage-risk based on weather information;<br />

weed recognition applications to<br />

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identify weeds and provide farmers a<br />

treatment recommendation; as well as<br />

developing digital farm management<br />

applications for smallholders. In the not<br />

too distant future, real-time analysis will<br />

help farmers identify pests, diseases, and<br />

weeds that threaten the farmer’s crops<br />

and yield, down to the square meter. Sensors<br />

and imaging techniques will zero-in<br />

on a problem and allow the farmer to<br />

treat it at the source. Field-specific modeling<br />

and integration of public and proprietary<br />

data will garner superior recommendations<br />

that a farmer can rely on.<br />

Plenty of data is already available. The<br />

latest satellite technology can deliver<br />

detailed maps, weather information, or<br />

even measure the biomass of a field to<br />

determine yield potential or possible weed<br />

problems. On a farm itself, a trail of data<br />

is created every season when the grower<br />

monitors the farm. The variety of seeds<br />

used, the GPS and product data from the<br />

machinery, water use and yield – most of<br />

this information is collected and stored to<br />

make it comparable over various seasons.<br />

The question is: How can this enormous<br />

amount of data be prepared in a way that<br />

it is of use? “What it comes down to is<br />

the correct interpretation of big data:<br />

Advancements in technology allow for<br />

software to sift through the myriad of<br />

data points, to analyze and combine them,<br />

and to set them all into proportion to<br />

retrieve a final and personalized recommendation,”<br />

says Thomas Schilling, Head<br />

of IT, Digital Farming at Bayer.<br />

How can all the data be made usable?<br />

Digital Farming will in the future deliver local<br />

and field-specific information.<br />

Bayer translates this basic data into<br />

practice-relevant and usable decisionmaking<br />

tools, which farmers can employ<br />

for soil and water management and to<br />

more precisely predict the impact of their<br />

actions – such as choice of seed variety,<br />

application rate of crop protection products,<br />

and harvest timing – making the<br />

risk management of the farm a much<br />

easier task, along with the chance to<br />

improve profitability in a sustainable<br />

way. The individualized recommendations<br />

can be transmitted directly to the<br />

farmer’s agricultural machinery. As such,<br />

geoinformation systems play an important<br />

role in sustainable agriculture. Bayer<br />

plans to offer its customers further digital<br />

services in the future in order to drive<br />

forward the digitalization of farming<br />

and sustainable agriculture.<br />

“We want to help farmers to implement<br />

their agronomic decisions with unprecedented<br />

accuracy, efficiency, and ease.<br />

By identifying the perfect timing and<br />

quantity of each product application<br />

for each field, we are ‘personalizing’<br />

our products for every individual. This<br />

support can one day be possible, down<br />

to the last square meter of every field.<br />

With these tailored treatments – never<br />

too much, nor too little – the farmer will<br />

in the future be able to take utmost care<br />

of the land, making each application in<br />

a more sustainable manner,” emphasizes<br />

Mathias Kremer, Head of Crop Strategies<br />

& Portfolio Management at Bayer’s Crop<br />

Science Division.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 113


Sustainable Trade and<br />

the Role of the Banking<br />

Industry<br />

Trade can support sustainable development in the global<br />

economy. Ruediger Senft, Head of Corporate Responsibility<br />

at Commerzbank, argues that banks can therefore be a<br />

major part of the movement toward a sustainable future.<br />

– supporting environmental protection,<br />

respecting human rights, ensuring fair<br />

labor conditions, and tackling corruption<br />

– thus upholding the core principles<br />

of the UN <strong>Global</strong> <strong>Compact</strong>. But<br />

for sustainable trade to truly take hold,<br />

increased levels of collaboration between<br />

the financial, political, regulatory, and<br />

consumer sectors will also be vital.<br />

The drivers of sustainable trade<br />

The global economy is being presented<br />

with important challenges regarding<br />

growth, such as the demand for increasingly<br />

scarce resources, which put the<br />

future of trade at risk.<br />

By Ruediger Senft, Commerzbank<br />

Sustainable trade is key to global development.<br />

Not only does it spur economic<br />

growth, it raises living standards, helps<br />

to fight poverty, and safeguards the environment.<br />

As the vital facilitators of<br />

global commerce, financial institutions<br />

are best placed to identify the dynamics<br />

of sustainable trade and help pave<br />

the way toward sustainable economic<br />

development for the future.<br />

Key to this is the banks’ ability to mitigate<br />

environmental, social, and governance<br />

(ESG) risks for trading companies<br />

Of course, this means that banks such<br />

as Commerzbank, whose business is financing<br />

world commerce, are heavily<br />

invested in sustainable trade as a longterm<br />

solution. By conserving resources<br />

across supply chains, offering fair prices<br />

to workers, and protecting the environment,<br />

sustainable trade provides a longterm<br />

way of maintaining stable economic<br />

development worldwide. To explore sustainable<br />

trade in depth and identify its<br />

key dynamics, Commerzbank published<br />

an extensive report in March 2015 titled<br />

114<br />

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Insights: Five Drivers of Sustainable Trade. The<br />

report found that sustainable trade relies<br />

on enacting progressive governmental<br />

regulation, building informed demand<br />

among consumers, ensuring sustainability<br />

in commercial supply chains, applying<br />

ethical standards and labels, and taking<br />

innovative approaches to finance. Such<br />

a variety of drivers stem from the fact<br />

that corporate responsibility has now<br />

become a very broad concept. Whereas<br />

originally it referred only to environmental<br />

concerns, it now encompasses<br />

all ethical and social concerns.<br />

Banks have a crucial role to play<br />

Given their central role in facilitating<br />

global trade flows, banks are particularly<br />

well placed to meet corporate demands<br />

for sustainability. Indeed, because they<br />

possess the organizational infrastructure<br />

to mitigate risks, they can ensure that<br />

global trade complies with ESG good<br />

practice.<br />

For example, as part of its commitment<br />

to sustainability, Commerzbank checks<br />

every single potential transaction it receives<br />

against its ESG guidelines. The<br />

bank’s ESG Risk Management department<br />

uses a qualitative approach to environmental,<br />

social, and ethical risks, and<br />

to this end cooperates closely with other<br />

relevant units at Commerzbank. Transactions,<br />

loans, and business relationships<br />

in which aspects of sustainability play a<br />

material role are extensively researched,<br />

analyzed, and subject to wide-ranging<br />

evaluation. In some cases, this may lead<br />

to the rejection of a transaction or the<br />

termination of a business relationship.<br />

On average, the department checks more<br />

than 5,000 transactions a year.<br />

The Roundtable on Sustainable Palm<br />

Oil (RSPO) is a case in point about the<br />

progress being made by banks, among<br />

others, in driving sustainable trade. With<br />

global demand for the vital resource<br />

increasing constantly, rainforests in Indonesia,<br />

Malaysia, Africa, and Central<br />

America are subject to destruction, with<br />

negative impacts both on the indigenous<br />

peoples who call the areas home and on<br />

the planet’s ability to absorb dangerous<br />

carbon emissions. Yet, the RSPO demands<br />

that all signatories meet stringent sustainability<br />

criteria. As a member of the<br />

RSPO, Commerzbank will not finance<br />

the trade of palm oil if suppliers fail to<br />

meet such criteria.<br />

Making the business case for<br />

sustainability<br />

In addition to ensuring that trade is<br />

sustainable, banks can also lead the<br />

way in making the “business case” for<br />

sustainability in the corporate world,<br />

reconciling a company’s motivation for<br />

profit with the need to respect the environment,<br />

society, and good governance.<br />

For example, no company will want to<br />

see its public image tarnished by links to<br />

poor working conditions in a developing<br />

country. But banks can mitigate against<br />

this type of risk by demanding respect for<br />

human rights, fair labor conditions, and<br />

anti-corruption measures across supply<br />

chains – hence avoiding considerable<br />

negative repercussions on a company’s<br />

global reputation.<br />

Indeed, with their knowledge of local<br />

trading environments, banks can ensure<br />

that companies deal with reliable partners<br />

abroad who offer good standards in<br />

corporate governance, thus safeguarding<br />

local workforces and the sustainable<br />

development of communities.<br />

How does the future look for<br />

sustainable trade?<br />

Making the business case for environmental,<br />

social, and ethical best practice<br />

in future world trade also depends on<br />

raising awareness about sustainability.<br />

In this respect, the financial sector must<br />

take a lead when it comes to promoting<br />

it among key stakeholders. This is<br />

why Commerzbank followed up with<br />

the release of a second report, Insights:<br />

Scenarios for the Future of Sustainable Trade,<br />

in October 2015, releasing it to other<br />

banks at the Swift <strong>International</strong> Banking<br />

Operations Seminar, the premier<br />

banking conference of the year.<br />

The latest report projects Commerzbank’s<br />

findings on sustainable trade<br />

into the future. Assessing the global economic<br />

outlook for the next 10–15 years,<br />

it offers the “best-case” and “worst-case”<br />

scenarios for sustainability in the global<br />

economy – and gives recommendations<br />

for a likely outcome.<br />

Without doubt, the pressure for sustainable<br />

trade will continue to grow in<br />

future. For example, consumers around<br />

the world are likely to become more<br />

aware of the ethical and environmental<br />

impacts of products and services. Thanks<br />

to raised awareness of ESG risks, they<br />

are likely to hold companies to stricter<br />

sustainability standards.<br />

Sustainability will also depend on all<br />

key stakeholders collaborating effectively,<br />

whether in the financial, political,<br />

regulatory, or consumer sectors. Banks<br />

form just one avenue toward realizing<br />

the goals of the UN <strong>Global</strong> <strong>Compact</strong>. But<br />

given their ability to finance sustainable<br />

trade, mitigate key ESG risks, and communicate<br />

their work to key audiences,<br />

banks will be essential to driving sustainability<br />

in the world economy.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 115


What Gets Measured<br />

Can Be Controlled<br />

and Managed<br />

By Antoine Jurdak, Consolidated Contractors Company<br />

Realizing the needs for sustainability efforts and plans to reduce CO 2<br />

footprints are guiding the<br />

construction industry toward new ways to optimize job execution, resulting in higher competitiveness.<br />

Asset management and equipment used in the construction industry – along with<br />

their associated running requirements, utilization, and health and fuel consumption – are major<br />

governing factors in sustainability and greenhouse gas emissions.<br />

CCC commitments are leading to the<br />

development and implementation of progressive<br />

technical skills, as projects are<br />

being executed in a more environmentally<br />

responsible manner. CCC embraces<br />

this responsibility and has developed<br />

many internal programs and processes<br />

that go beyond what is described in this<br />

article. Some of our achievements are<br />

described below.<br />

Centralization<br />

Perhaps one of the biggest challenges for<br />

CCC on “asset-intensive” projects is how<br />

to effectively manage different types of<br />

assets without creating a huge management<br />

workload that erodes the bottom<br />

line. So, maximizing the availability and<br />

performance of assets is more critical to<br />

success than ever before.<br />

Decentralized operations contribute to<br />

delays in collecting data and increase<br />

errors. Automation and centralized databases<br />

are essential for timely, big data<br />

manipulation and applying analytics,<br />

consequently enriching the management<br />

by changing the paradigm from “react”<br />

to “anticipate.”<br />

Today, CCC fleet managers and maintenance<br />

officers are making immediate<br />

and strategic decisions thanks<br />

to effective data analysis capabilities<br />

and reporting and are able to get asset<br />

management information into the<br />

hands of maintenance technicians and<br />

storeroom personnel rapidly. CCC has<br />

advanced considerably in reinventing<br />

the way we manage our fleet and in<br />

providing leading solutions to converge<br />

operational technologies and IT through<br />

the deployment of our in-house, nearreal-time<br />

control systems (CCC Cloud:<br />

iFalcon) and IBM Asset Management<br />

system (Maximo) to handle, manage,<br />

and control timely maintenance, repairs,<br />

job cards, spare-parts stocks, availability,<br />

and fuel consumption during the full<br />

lifecycle of each asset.<br />

Equipment idling time<br />

Excessive idling can be very expensive<br />

and harmful in terms of emissions;<br />

equipment running hours should be<br />

associated with certain production,<br />

otherwise fuel is burnt unnecessarily.<br />

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This can be reduced by motivating the<br />

operators to change their behavior to<br />

avoid running the equipment unnecessarily<br />

when not in use, except in very<br />

few applications. In an idling state, an<br />

engine may not generate enough heat<br />

to achieve proper combustion, leading<br />

to rapid oil contamination and engine<br />

wear, hence excessive exhaust emissions.<br />

The key component of any effort<br />

to reduce idling time is proper planning<br />

and performance measurement; that is<br />

where CCC started adopting telematics.<br />

Maintenance<br />

When a machine starts its production<br />

shift, it should work without interruption.<br />

CCC’s goal is to have a minimum<br />

number of on-shift failures.<br />

Due to the present centralization of<br />

information and controls, maintenance<br />

programs are uncompromisingly thorough;<br />

repairs and rebuilds are performed<br />

to strict quality standards; and replacement<br />

decisions are well-timed to ensure<br />

that the fleet is as reliable as possible<br />

and emissions do not exceed the manufacturer’s<br />

norms.<br />

Unplanned and excessive equipment<br />

breakdowns are mostly the product of<br />

a lack of preventive maintenance. Such<br />

events directly alter the job execution<br />

plan, which in many cases cannot be<br />

revised, resulting in an increase in imposed<br />

idling time.<br />

Collateral costs, delays, and associated<br />

increases in emissions are extremely<br />

difficult to measure. They do not appear<br />

in cost reports and are often the subject<br />

of bitter debate. Regardless, there is no<br />

doubt that they exist and that they have<br />

a huge impact on costs, productivity, and<br />

sustainability.<br />

Fuel and CO 2<br />

CCC recognizes that one of our major<br />

environmental impacts is the air pollution<br />

related to construction machinery,<br />

transportation equipment, and vehicles.<br />

The global growth in CCC’s business sectors<br />

inevitably intensifies or reduces total<br />

fuel consumption across our operations<br />

– where the bottom line figures reach<br />

hundreds of millions of liters – and<br />

proportionally affects our CO 2<br />

impact.<br />

As such, the importance of the fuel<br />

economy to the successful operation of<br />

construction sites cannot be understated.<br />

Fuel is one of the largest variable costs,<br />

and while no operation can control the<br />

cost and the supply quality of fuel, CCC<br />

has been able to find at least some control<br />

over the following:<br />

• Adopting tight selection criteria during<br />

equipment acquisitions, giving priority<br />

to low HP ratings, low-emission options,<br />

exhaust treatment options drag<br />

improvement gadgets, efficient system<br />

designs, smart engine shutdowns during<br />

prolonged idling, and recyclable<br />

units and components;<br />

• Applying timely and proper preventive<br />

maintenance;<br />

• Disposing of old equipment and renewing<br />

the fleet to improve on the average<br />

fleet age and increase the population<br />

of regulated engines;<br />

• Monitoring tires for wear, pressure,<br />

alignment, etc.;<br />

• Buying, handling and using the right<br />

fuel;<br />

• Introducing advanced automation in the<br />

fuel distribution process and control;<br />

• Monitoring and control of individual<br />

and cumulative idle time by using nearreal-time<br />

data-capturing systems;<br />

• Improving operator efficiency and job<br />

knowledge and awareness through<br />

regular training schemes.<br />

Telematics<br />

When used through CCC cloud data<br />

(iFalcon) on idle time, telematics alone<br />

can help managers save thousands of<br />

dollars from fuel burnt during the life<br />

of a machine, preserve vital warranty<br />

hours, and determine best practices in<br />

each application. iFalcon Telematics<br />

can be used to capture, analyze, and<br />

document a baseline for idling time,<br />

utilization, maintenance requirements,<br />

fuel consumption, load factors, and an<br />

extensive list of other operational attributes<br />

as well as look for ways to get<br />

the right data, at the right time, to the<br />

right people through intelligent KPI’s.<br />

Challenges<br />

• Building up and maintaining proper<br />

awareness of sustainability and energy<br />

conservation within the operating<br />

teams while copping with their in- and<br />

outflows;<br />

• Guaranteeing a viable high “technical<br />

condition” of every operating plant<br />

to ensure good performance of equipment<br />

on site without compromising the<br />

timely project execution milestones;<br />

• Imposing limitations on equipment owners<br />

according to the global status of diesel<br />

fuel sulfur levels. This is a direct restriction<br />

on deployment of low-emission<br />

engines in many countries of operation;<br />

• Diversity and distribution dilemma and<br />

the effect on availability, types, and<br />

models of equipment, which renders<br />

standardization impossible in many<br />

cases;<br />

• Management decentralization;<br />

• Fleet mobilization and demobilization<br />

considering limitations from local<br />

regulations;<br />

• Technical resources and skills availability;<br />

• When / where / what to invest;<br />

• Political instability in some countries;<br />

• Environmental constraints and social<br />

responsibility.<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 117


Stakeholder Engagement:<br />

A Key Strength for the<br />

Success of Our Projects<br />

By EDF Group<br />

Consultation does not happen spontaneously. But without it, we believe that it would no longer<br />

be possible to imagine the smallest project – even more so if it is an industrial project and a host<br />

region needs to be found. Rather, what is needed is the willingness to create – through consensus<br />

– the conditions under which a project can be sustainable, in accordance with a region’s own<br />

development aims.<br />

Against the backdrop of the energy transition,<br />

EDF aims to become the champion of<br />

low-carbon growth and the standard-setting<br />

electricity company for performance<br />

and responsibility. The main provisions<br />

of Cap 2030 – EDF Group’s strategic<br />

project – are to be closer to customers<br />

and to double by 2030 its installed global<br />

capacity in renewables: wind, solar, marine<br />

energy, and hydropower. That adds<br />

up to hundreds of projects that must be<br />

put in place throughout the world. The<br />

stakes are high to ensure their sustainability<br />

and public acceptance.<br />

We have heard the warning bells that<br />

society is sending out in countries around<br />

the planet: People expect more dialogue<br />

and are increasingly vigilant when it<br />

comes to projects that are likely to modify<br />

the surrounding environment. For that<br />

reason, we have decided to make consultation<br />

our key strength for success and a<br />

lever for our company’s transformation<br />

and the way it goes about its business.<br />

Building offshore wind power<br />

with fishermen, environmental<br />

organizations, and SMEs<br />

In France, EDF Energies Nouvelles is<br />

conducting several offshore wind farm<br />

projects. One of these is an 80-turbine<br />

farm in Brittany, off the coast of the fishing<br />

town of Le Croisic and not far from<br />

the shipbuilding town of Saint-Nazaire.<br />

In the space of five years, apart from the<br />

mandatory public inquiry procedures,<br />

dialogue and consultation have enabled<br />

many legitimate concerns of local people<br />

to be assuaged. Fishermen participated<br />

to study trips to the United Kingdom to<br />

find out about existing offshore wind<br />

farms and talk to their counterparts.<br />

They then worked with engineers at<br />

EDF Energies Nouvelles to establish a<br />

location for the future wind farm that<br />

would have the least impact on their<br />

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activity. The Bretagne Vivante non-profit<br />

organization was tasked with carrying<br />

out a study on the impact of the wind<br />

turbines on bird and bat populations in<br />

order to gain a better understanding of<br />

the behavior of maritime fauna, which<br />

was little known up until then. The region’s<br />

small companies had very limited<br />

international experience, so to prepare<br />

them for how to participate in technical<br />

calls for tenders, training in English was<br />

put in place via a non-profit that wished<br />

to protect their interests. Welding skills –<br />

which are very specific for offshore wind<br />

turbines – were also improved. In the<br />

end, all the environmental, fishing and<br />

industrial stakeholders concerned are<br />

now working alongside EDF Energies<br />

Nouvelles in support of the project.<br />

In <strong>2016</strong>, the EDF Group has committed<br />

to systematically organizing<br />

a process of transparent and open<br />

dialogue and consultation for every<br />

new project around the world.<br />

Forming partnerships to conduct<br />

our business<br />

Consultation and dialogue lead us to<br />

change our practices. As we experiment<br />

and see the resulting benefits, we build<br />

new ways of conducting our business<br />

through forming operational partnerships<br />

that enable us to bring in project<br />

stakeholders as early as possible. In the<br />

French Pyrenees, for example, we reorganized<br />

maintenance schedules for our<br />

major hydro dams. The environmental<br />

engineers of the national nature park<br />

help us identify the breeding areas of the<br />

bearded vulture, a protected bird of prey.<br />

We modify the helicopter fly-over plans<br />

that transport the people and materials<br />

required so as not to disturb the mother<br />

vultures. Any work that is too close to<br />

young broods is postponed.<br />

Another example concerns fighting fuel<br />

poverty. In Toulouse, we bring together<br />

neighborhood resident associations with<br />

small businesses working in home renovation<br />

and suppliers of light equipment<br />

and tools. They form workshops that<br />

enable vulnerable people to benefit from<br />

advice, training, and tools so they can<br />

renovate their own homes, especially to<br />

improve energy efficiency.<br />

Training project managers<br />

Consultation requires a clear decisionmaking<br />

process, procedural rules, and set<br />

principles for all stakeholders involved.<br />

In addition, the fears and worries that<br />

can hamper trust have to be allayed. To<br />

achieve all this, in 2012, EDF set up a<br />

Group-wide training course and implemented<br />

a methodology, called Durabilis,<br />

for training project teams in how to identifity<br />

local priorities and thereby carry out<br />

the ground work for better stakeholder<br />

inclusion in projects. The areas looked at<br />

are local value creation, the consequences<br />

of projects on the areas where they are<br />

located, and environmental health issues.<br />

Alongside the usual criteria of national<br />

and local health regulations as well as<br />

the governance of health issues at the<br />

regional level, Durabilis backs up regional<br />

assessment tools and encourages the<br />

inclusion of several additional sets of<br />

criteria (geographic, demographic, social,<br />

and cultural). These criteria examine the<br />

region’s environmental characteristics;<br />

the state of existing pollution and health<br />

risks; expected impacts due to climate<br />

change, weather, lifestyles, and on quality<br />

of life; people’s levels of education;<br />

healthcare systems in the region; and<br />

so on. In total, more than 60 questions<br />

relating to environmental health were<br />

fed into the regional assessment that the<br />

project teams drew up.<br />

“CONSULTATION<br />

WITH REGIONAL<br />

STAKEHOLDERS”<br />

Specific Training for all<br />

Project Managers<br />

Manuel Lenas is the director of the One<br />

River, One Territory Sud-Isère-Drôme<br />

branch, which is part of a program to<br />

support the economic development of<br />

the valleys where EDF operates dams.<br />

The aim is to maintain the vitality of<br />

areas whose economies are largely<br />

rural. Like a good number of project<br />

managers, Lenas has taken an in-house<br />

training course on conducting a consultation<br />

process. He explains what is<br />

needed to play his role more effectively.<br />

“Reaching out to stakeholders is an integral<br />

part of the work I do to manage<br />

an economic development program.<br />

Engaging in dialogue, keeping an open<br />

mind, building a relationship – I used<br />

to do all that empirically, based on my<br />

own experience. The training course<br />

taught me that it’s possible to be more<br />

effective in relations with stakeholders,<br />

and that a sound method helps<br />

you adopt the right stance. You have<br />

to shift from a relationship in which<br />

you go with the flow of what’s being<br />

said to something that is led, which<br />

includes phases where you listen, you<br />

ask questions, you add to the proposals,<br />

and you consolidate. So there are<br />

protocols to put in place in order to<br />

be effective. It’s not just talking together<br />

for talking’s sake: You’re there<br />

to decide on a project together. Jointly<br />

defining the program will give it every<br />

chance of legitimacy for the long term.<br />

To sum up, I would say that this course<br />

has made me realize that there’s a<br />

stance to be taken and a method to<br />

be followed! That’s helped me more<br />

easily and rapidly co-construct the<br />

local development program with the<br />

economic organizations present in<br />

the areas our branch covers.”<br />

<strong>Global</strong> <strong>Compact</strong> <strong>International</strong> <strong>Yearbook</strong> <strong>2016</strong> 119


Above the Standard:<br />

HOCHTIEF at the “Crossrail”<br />

Project in London<br />

In ever-expanding cities across the world, city planners are rethinking their transportation policies<br />

and setting their sights on sustainable mobility. In spaces that had been allocated to cars, people<br />

are now the focus. People and the environment benefit from expanding bicycle path networks,<br />

car-sharing services, and better local public transport connections. A look at London shows where<br />

we are heading – and that HOCHTIEF is a safe companion on this path. In the UK capital, the international<br />

construction company is making a key contribution to a highly sustainable tunneling<br />

project.<br />

By Indra Folke, HOCHTIEF<br />

“Crossrail” is a new 118-km rail line from<br />

west to east offering access to Heathrow<br />

Airport. It is currently one of the largest<br />

transportation infrastructure projects in<br />

Europe: More than 10,000 engineers and<br />

builders have been feverishly working<br />

to build 10 new stations and drill 42 km<br />

of tunnels.<br />

In a joint venture with J. Murphy & Sons,<br />

HOCHTIEF has been a key partner in<br />

one of the most demanding lots. In June<br />

2015, the team completed – on time and<br />

within budget – the construction of the<br />

almost 3-km-long tunnel section C 310,<br />

which leads from Plumstead, underneath<br />

the Thames River, to North Woolwich.<br />

With the construction of the two tubes<br />

– each having an outside diameter of<br />

more than 7 meters – the team provided<br />

an impressive performance not only<br />

with regard to engineering, but also in<br />

economic, ecological, and social terms.<br />

“Sustainable aspects are gaining in importance,<br />

particularly for major infrastructure<br />

projects, and are having an increasing<br />

influence on the awarding and execution<br />

of projects,” says Riku Tauriainen, who<br />

led the Crossrail project on behalf of<br />

HOCHTIEF. Especially in London with the<br />

Crossrail project, the client demanded<br />

very high standards. Because of their<br />

many years of experience, the tunneling<br />

experts were well prepared.<br />

Energy demand on construction site<br />

greatly reduced<br />

Since the beginning of the C 310 project<br />

in early 2011, the team had focused on<br />

reducing emissions at each work site.<br />

As an example, they saved 80 percent of<br />

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the energy demand for construction site<br />

lighting. The site was equipped with LED<br />

lights, which require considerably less<br />

energy than conventional light sources.<br />

In addition, materials and excavation<br />

materials were recycled, transport durations<br />

were significantly reduced, and<br />

new technologies were used. By optimizing<br />

construction workflows, employees<br />

reused some 1,200 tons of material. The<br />

performance regarding occupational<br />

safety and health standards was also<br />

optimized.<br />

When installing the inner shell of the<br />

tunnel, a difference of only 10 cm may<br />

mean monetary savings of thousands.<br />

HOCHTIEF adapted the width specified<br />

by the client of the lining segments from<br />

1.5 to 1.6 meters. This idea resulted in<br />

an entire chain of positive effects. First,<br />

the volume of segments that had to be<br />

produced, transported, and used was<br />

reduced by 7 percent, reducing CO 2<br />

emissions<br />

and costs accordingly. Underground,<br />

where the two tunnel boring machines<br />

“Sophia” and “Mary” worked around the<br />

clock, the installation of a total of 3,405<br />

concrete rings went considerably faster.<br />

Due to the lower number of segments,<br />

there are now fewer connection joints<br />

between segments, and thus fewer possible<br />

“weak points” in the tunnel. The<br />

project team gained several working<br />

days in this way.<br />

Groundwater recycled and reused<br />

In terms of conserving resources, employees<br />

also had effective ideas. For<br />

example, since groundwater had to be<br />

removed from the excavation site, tunnel<br />

experts collected the water and recycled<br />

it. Combined with collected rainwater,<br />

it was used in propulsion, in bentonite<br />

recycling, and as a spray liquid as well<br />

as for mortar preparation. Thus, the<br />

team saved 2 million liters of drinking<br />

water per week – 68 million liters during<br />

the entire project: an amount that<br />

would fill 27.2 Olympic swimming pools!<br />

For this achievement, the joint venture<br />

was awarded a prize in the category of<br />

“Innovation and Environmental Performance”<br />

by the client who had specifically<br />

promoted and called for sustained acting<br />

through internal competition.<br />

The tunnel team used the opportunity<br />

to ask for sustainable ideas internally as<br />

well. The “Green Idea Tree” was consequently<br />

created in order to continually<br />

improve ecological efficiency. The best<br />

proposals were awarded and implemented.<br />

One of these ideas was to dry the lime<br />

sludge taken from the Thames River<br />

underground during the early phases<br />

of the project. This procedure made it<br />

possible to use the sludge again as environmentally<br />

friendly material in other<br />

projects. Other excavation materials were<br />

used to replenish and to redevelop the<br />

building site. A total of 3 million tons of<br />

excavation materials from the Crossrail<br />

project were shipped to Essex in order to<br />

create a bird sanctuary in a river delta.<br />

Transporting the materials by ship – a<br />

total of 1,528 charges – was the best<br />

low-emissions alternative and served<br />

to avoid numerous truck trips through<br />

downtown London, which already experiences<br />

heavy traffic volumes. The habitat<br />

will provide a safe home to tens of thousands<br />

of domestic and migratory birds<br />

and will have a pronounced balancing<br />

effect on the wildlife.<br />

Employees engage in social projects<br />

Aside from environmental issues, the<br />

team at lot C 310, led by project manager<br />

Riku Tauriainen, also took into<br />

account social aspects. In addition to<br />

constant exchanges with local residents,<br />

employees did volunteer work. They organized<br />

transport services for seniors to<br />

go shopping, repainted Salvation Army<br />

accommodations, and collected debris by<br />

hand in an adjacent public park. After<br />

both tunnels became accessible, residents<br />

were allowed to explore them in an open<br />

house of sorts.<br />

The installation of the tracks and the<br />

building of stations began in 2015.<br />

The first trains will travel through the<br />

tunnel in 2018 and transport thousands<br />

of people daily. With this project,<br />

HOCHTIEF has made its contribution<br />

to sustainability and has corroborated<br />

its vision: “HOCHTIEF is building the<br />

world of tomorrow.”<br />

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Climate Protection<br />

Through Innovation<br />

The world is in a constant state of change. Effective climate protection requires both creativity<br />

and expert knowledge. With the aim of cutting fossil fuel consumption, MAN is developing new<br />

transportation and energy solutions that make our mobility even more efficient – and that take<br />

account of the entire product lifecycle.<br />

By Peter Attin, MAN<br />

MAN’s Climate Strategy<br />

Negotiated at the 2015 United Nations<br />

Climate Change Conference, the Paris<br />

Agreement represents a global consensus<br />

on climate protection. Signatories have<br />

agreed to conserve fossil fuels and radically<br />

cut greenhouse gas emissions. To<br />

achieve the targets, government, society,<br />

and business will have to work together.<br />

Industry must act as an innovator and<br />

provide efficient technology that contributes<br />

to a reduction in oil, gas, and<br />

diesel consumption.<br />

Because the transportation and logistics<br />

sector is responsible for around onequarter<br />

of global CO 2<br />

emissions, it can<br />

play a key role in slowing the pace of<br />

climate change. As one of Europe’s leading<br />

commercial vehicle and mechanical<br />

engineering players, the MAN Group sees<br />

energy efficiency as an essential element<br />

of its products and production processes.<br />

We place top priority on the development<br />

and use of alternative drives and fuels.<br />

In 2011, MAN launched its integrated<br />

climate strategy, with five core initiatives<br />

aimed at both its production sites<br />

and its products.<br />

1 25 percent reduction<br />

in CO 2<br />

emissions at<br />

MAN sites by 2020<br />

(baseline: 2008)<br />

2 Consistently efficient<br />

product portfolio<br />

3 Customer involvement<br />

and dialog<br />

4 Potential for reducing<br />

CO 2<br />

emissions along the<br />

product lifecycle<br />

5 Climate strategy<br />

management<br />

We will reduce CO 2<br />

emissions at MAN<br />

sites by improving energy efficiency, using<br />

renewable energy sources (solar, wind,<br />

geothermal), generating energy using<br />

combined heat and power (CHP) plants,<br />

and through integrated energy-management<br />

technology and organization.<br />

We position ourselves in the commercial<br />

vehicles and power-engineering sectors<br />

with sustainable products and services.<br />

We involve our customers and talk to<br />

them about ways to reduce the global<br />

carbon footprint. After all, many of our<br />

customers have already set themselves<br />

ambitious targets for cutting CO 2<br />

emissions.<br />

To identify potential for reductions, we<br />

measure CO 2<br />

emissions along the entire<br />

product lifecycle.<br />

We manage the implementation of our<br />

Climate Strategy and have defined KPIs<br />

that are regularly measured and published.<br />

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In South Africa, MAN’s first carbonneutral<br />

plant cuts the Group’s carbon<br />

footprint by 860 tons of CO 2<br />

emissions<br />

each year.<br />

Innovation is the key<br />

Innovation is the key to achieving<br />

modern forms of mobility that are also<br />

climate-friendly. MAN offers powerful<br />

machines and engines that save fuel and<br />

conserve resources, designed to reduce<br />

the emissions generated by the transportation<br />

sector. MAN takes a holistic view<br />

of the lifecycle of its products, extending<br />

from the production stage to the use<br />

phase and continuing through to the<br />

remanufacturing of used components.<br />

Production powered by the sun<br />

Integrated climate protection begins<br />

in the production process. MAN has<br />

set itself the target of reducing the CO 2<br />

emissions of its plants 25 percent by 2020,<br />

compared to a 2008 baseline. Having<br />

cut emissions by 19.5 percent in 2015,<br />

the Group is on track to meet this goal.<br />

Through combined heat and power (CHP),<br />

LED lighting, and renewables, MAN is<br />

approaching the challenge from many<br />

different angles, always with the aim of<br />

reducing energy consumption and CO 2<br />

emissions. Photovoltaic systems represent<br />

one of the most effective ways to<br />

conserve resources at our facilities.<br />

Since the end of 2014, our production<br />

site in Pinetown, South Africa, has been<br />

generating more solar power than it<br />

needs for its own operations, allowing it<br />

to feed surplus electricity into the local<br />

grid. A photovoltaic system on the roofs<br />

of the production halls, which offer a surface<br />

area of 6,300 m 2 , combined with 300<br />

days of sunshine each year, make Pinetown<br />

MAN’s first carbon-neutral plant.<br />

And our production sites in Munich and<br />

Plauen in Germany and Changzhou in<br />

China also use photovoltaic systems to<br />

generate green electricity.<br />

Engines powered by natural gas<br />

Some 90 percent of the greenhouse gas<br />

emissions produced over the product<br />

lifecycle are generated during the use<br />

phase. For MAN, this makes it all the<br />

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the transportation sector. MAN is leveraging<br />

the digital revolution to make<br />

efficient vehicles even more efficient<br />

– cutting costs for its customers and<br />

conserving resources. Truck connectivity<br />

plays a key role in this process.<br />

Fighting climate change on the high<br />

seas with dual-fuel engines from<br />

MAN, widely considered the most<br />

environmentally compatible on the<br />

market.<br />

Today, MAN already offers integrated<br />

services that cut fuel consumption, optimize<br />

fleet-capacity utilization, and<br />

reduce downtime for servicing and<br />

maintenance. All this is made possible<br />

by the MAN TeleMatics vehicle module,<br />

which collects vehicle and driving data<br />

and makes it available to the customer<br />

in real time. Vehicle servicing can be<br />

MAN offers a virtual distance-learning<br />

program that can cut fuel consumption<br />

by around 10 percent.<br />

more important to develop alternative<br />

drive systems for trucks and ships that<br />

are reliable and low-emission. Gas-powered<br />

engines play an important role here.<br />

Running on natural gas, the MAN Lion’s<br />

City GL CNG municipal bus almost<br />

achieves CO 2<br />

-neutral operation. If one<br />

considers not only the purchase price but<br />

also the operating and maintenance costs,<br />

the bus also offers savings of around 15<br />

percent – a good example of economy<br />

and ecology in harmony.<br />

Marine transportation is also made more<br />

climate-friendly with MAN gas-powered<br />

engines. And MAN unites energy efficiency<br />

and flexibility in its dual-fuel<br />

engines, which can run on both liquid<br />

and gaseous fuels. When running on<br />

natural gas, the engine’s CO 2<br />

and nitrogen<br />

oxide emissions are significantly<br />

lower, while sulfur oxides, soot, and<br />

particulate emissions are almost completely<br />

eliminated. In addition to highly<br />

efficient gas-powered engines, MAN offers<br />

exhaust after-treatment systems<br />

that can be retrofitted to older engines,<br />

allowing them to meet current and future<br />

emissions requirements.<br />

Coaching in the digital revolution<br />

Increasing costs and fierce competition<br />

are among the many challenges facing<br />

Potential for<br />

reducing CO 2<br />

emissions<br />

in the<br />

product lifecycle<br />

To identify the potential for<br />

reducing the CO₂ emissions in<br />

the lifecycle of its products,<br />

MAN calculates product carbon<br />

footprints (PCF) for virtually<br />

all product groups of the<br />

MAN Truck & Bus subgroup and<br />

for selected product groups of<br />

MAN Diesel & Turbo.<br />

The lifecycle stages are defined<br />

in accordance with standard<br />

automotive industry practice:<br />

1. production<br />

2. use phase<br />

3. end of life (recycling and<br />

waste processing)<br />

Our calculation methodology<br />

is based on the requirements of<br />

the Greenhouse Gas Protocol.<br />

The findings confirm that more<br />

than 90 percent of our products’<br />

greenhouse gas emissions are<br />

generated during the use phase.<br />

scheduled well in advance, optimizing<br />

fleet-capacity planning. As a result, the<br />

trucks operate more efficiently, saving<br />

both time and fuel.<br />

MAN also uses digitization to foster<br />

more environmentally compatible styles<br />

of driving. The driver still has a major<br />

influence on fuel economy – even if<br />

driver assistance systems already play<br />

an important supporting role. With its<br />

Connected CoDriver system, MAN offers<br />

its customers a green driving coach as a<br />

temporary virtual co-driver. MAN Tele-<br />

Matics captures the driving data, which<br />

allows the coach to analyze the vehicle,<br />

the style of driving, and the route profile.<br />

Based on this information, the coach can<br />

use the hands-free system to speak to<br />

the driver and provide advice on more<br />

efficient driving. This can help even<br />

experienced drivers achieve a further<br />

reduction in fuel consumption.<br />

Riding the slipstream<br />

Thanks to digitization and connectivity,<br />

trucks can safely follow one another,<br />

nose-to-tail. Road trains made up of<br />

multiple trucks, known as “platoons,”<br />

help to save fuel. They could also boost<br />

the safety and efficiency of transporting<br />

goods by highway. To demonstrate the<br />

potential of this concept, MAN took part<br />

in the European Truck Platooning Chal-<br />

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“Platooning” lets trucks take advantage<br />

of the slipstream of the vehicle in front,<br />

boosting efficiency and saving fuel.<br />

After sorting, the used parts are washed to<br />

remove grime and oil. Only then it is possible<br />

to see which parts can be remanufactured<br />

as MAN Genuine Parts ecoline.<br />

Awards 2015<br />

<strong>International</strong> Bus Planner Sustainability Prize for the MAN Lion’s City GL CNG<br />

municipal bus with natural gas drive<br />

Green Ship Technology Award for fuel-saving and environmentally friendly<br />

ship-propulsion solutions with the concept “Slow Steaming Optimization with<br />

Derating and Propeller Upgrade”<br />

European Transportation Prize for Sustainability for the MAN Genuine Parts<br />

ecoline as well as the climate-efficient vehicle-leasing program by MAN and<br />

EURO-Leasing<br />

European Excellence Award for the MAN Corporate Responsibility Report<br />

lenge – a test drive in which the trucks<br />

are linked by digital data transmission.<br />

Two or more trucks follow each other<br />

at a close distance, allowing them to<br />

take full advantage of the slipstream<br />

of the vehicle in front. The driver of<br />

the lead vehicle sets the pace and the<br />

direction, with the following vehicles<br />

in semi-automated driving mode. Driver<br />

assistance systems such as adaptive cruise<br />

control and autonomous emergency<br />

braking systems ensure that one vehicle<br />

can safely follow another with no risk<br />

of a collision, despite the short following<br />

distance.<br />

These compact and energy-efficient formations<br />

have a marked positive impact<br />

on the flow of traffic, while diesel consumption<br />

and CO 2<br />

emissions are cut by<br />

up to 10 percent. Platooning is a clear<br />

example of the extent to which the transportation<br />

sector will change, with fully<br />

connected trucks making the roads safer<br />

and the air cleaner.<br />

Returned to the product lifecycle<br />

The climate footprint of a vehicle depends<br />

to a large extent on the length<br />

of its service life. A long service life for<br />

the individual technical components not<br />

only makes economic sense, but also<br />

leads to a reduction in CO 2<br />

emissions and<br />

resource consumption in the production<br />

of new ones.<br />

With our MAN Genuine Parts ecoline<br />

initiative, we extend the service life of our<br />

genuine parts – such as coolant pumps or<br />

crankshafts – by returning used parts to<br />

the use phase. A comprehensive remanufacturing<br />

process in our plant in Nuremberg,<br />

Germany, completely restores the<br />

functionality of used original components.<br />

The first step is a thorough cleaning. The<br />

components are dismantled, cleaned in a<br />

wash bay, sandblasted, recoated – and, in<br />

some cases, rejected. The cleaning process<br />

reveals which parts are still usable and<br />

which are only good for recycling. The<br />

next step is to remanufacture the functional<br />

components and replace any worn<br />

parts. Following remanufacturing, MAN<br />

installs the components and tests their<br />

functionality. The quality standards are<br />

high, with MAN Genuine Parts ecoline<br />

products covered by the same warranty<br />

conditions as new parts – but at prices<br />

up to 50 percent lower. Here, economy<br />

and ecology go hand in hand.<br />

Find out more:<br />

www.cr-report2015.man<br />

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Reducing Environmental<br />

Impact via Digitization<br />

mcs believes sustainable processes and production will soon be the industry standard, and we<br />

strive to be one of the first movers. For us, sustainability is the only way forward. We are using<br />

digitization to improve efficiency and save natural resources, while simultaneously increasing<br />

transparency and cost-savings for our clients.<br />

By Shay Clark, mcs<br />

Begun in a small town in Germany in<br />

1975, mcs (media contact service) has<br />

grown from a family business to an international<br />

promotional products agency.<br />

The firm currently sources its products<br />

from hundreds of suppliers globally. As<br />

a leading partner of the <strong>International</strong><br />

Partnership for Premiums & Gifts (IP-<br />

PAG AG) joint venture initiative, mcs<br />

has access to 60 partner offices in more<br />

than 43 countries.<br />

away after a trade fair or when it becomes<br />

outdated. According to a 2010<br />

European Commission environmental<br />

report, in Europe, materials with a commercial<br />

value of around € 5.25 billion are<br />

thrown away each year. Using natural<br />

resources to needlessly produce items<br />

that are never used makes no sense for<br />

businesses or the planet. Luckily, mcs<br />

realized that slow and limited access<br />

to information is the root cause of this<br />

destructive trend, so the firm is now<br />

using intelligent planning and IT to<br />

reduce unnecessary waste. mcs now<br />

builds custom IT solutions via their<br />

Ziggy platform, so clients can access<br />

relevant information conveniently, 24<br />

hours a day.<br />

Sustainable supply chains save<br />

money and decrease resource use<br />

Businesses have traditionally ordered<br />

marketing products from multiple suppliers,<br />

but mcs offers all promotional<br />

materials and print media to its clients<br />

on one easy-to-use online platform. This<br />

decreases the time needed for companies<br />

to order and design various items from<br />

multiple firms, while also eliminating excessive<br />

production, shipping, packaging,<br />

and storage that has been generated in<br />

the past. The results are twofold: Clients<br />

save money, whereas carbon emissions<br />

and the use of natural resources decrease.<br />

IT eliminates waste in the supply<br />

chain<br />

Many companies over-order promotional<br />

materials, only to throw much of them<br />

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When mcs recently began working with<br />

a client in Switzerland, more than €2<br />

million of unused products had to be<br />

thrown away simply because they were<br />

outdated. Sadly, this is not an isolated<br />

case. Upon switching to mcs, another<br />

new client was quickly informed that<br />

25 percent of their stock was tied up<br />

in outdated promotional materials sitting<br />

in a warehouse. With the help of<br />

mcs’ analytics, these and other clients<br />

now only order popular, fast-moving<br />

promotional products.<br />

Ziggy means lower risk, decreased<br />

costs, and less waste<br />

At mcs the idea is not to produce more,<br />

but to produce the right amount of the<br />

right things at the right time. mcs offers an<br />

expansive full-service solution surpassing<br />

the conventional offerings of merchandisers<br />

or printers that can be integrated into<br />

any IT landscape. This user-friendly system<br />

seamlessly blends with the client’s own<br />

intranet to provide the client’s purchasing,<br />

marketing, sales, and HR departments<br />

with transparent planning, handling, and<br />

control of all marketing media. Ziggy<br />

further supports clients’ purchasing departments<br />

by combining demands from<br />

various branches located in multiple locations.<br />

This streamlines branding, shortens<br />

processing time, prevents overstocking,<br />

and economizes on transport. The result<br />

is an effective reduction of stock, along<br />

with simultaneously improved availability<br />

that creates less waste, saves time, and<br />

frees up budgets.<br />

Reporting analytics offer improved<br />

transparency<br />

mcs has found that the transparent reporting<br />

and state-of-the-art analytics provided<br />

by Ziggy reduce waste and uncover<br />

potential savings time and time again.<br />

This feature helps clients track their order<br />

quantities, buying patterns, and rates of<br />

product usage, which reduces waste by<br />

helping clients to only order the amount<br />

of product needed. Through reporting<br />

and consulting, mcs alerts clients about<br />

which products are performing poorly or<br />

losing popularity to reduce ordering of<br />

these “slow movers.” A positive waterfall<br />

effect occurs: Fewer natural resources are<br />

used, needless waste caused by accidental<br />

excess ordering decreases, and fewer<br />

emissions from shipping are incurred.<br />

In this way, historic overproduction of<br />

products is reduced.<br />

Since beginning its partnership with mcs<br />

in 2011, the promotional firm’s largest<br />

account has not sent any merchandise<br />

items to landfills. “We have made our<br />

clients aware of the print items that have<br />

not moved in a long time and have given<br />

them the option to recycle these items.”<br />

On-demand production<br />

Capacities of Ziggy mean that more<br />

merchandise and print products can<br />

be created quickly on demand. Printing<br />

companies near the end-user produce<br />

materials within days, which eliminates<br />

the need to print media in advance, only<br />