Global Compact International Yearbook 2009

Global Compact 

International Yearbook 

2009

Published by macondo Media Group with kind support from: 

Adecco Group 

Ampeg 

Amazon Carribean Guayana 

Autostrade per L´Italia 

Arcandor 

Carrefour 

Coca-Cola Hellenic 

Danfoss 

Dong Energy 

E.ON 

Ernst & Young 

Gandaki Bee Concern 

Grundfos 

Holcim 

Martha Tilaar Group 

Medine 

Nexen 

Novo Nordisk 

Otto Group 

REN 

Groupe SEB 

Siemens 

PT Smart TBK 

TMS Group 

Toms 

TÜV Rheinland 

2 

Global Compact International Yearbook 2009

Agenda 

Foreword 

“ 

The United Nations Global Compact is both a policy platform and a practical 

framework for companies that are committed to sustainability and responsible 

business practices. It provides a forum for exchanging current and emerging 

best practices and for debating the role that business can and must play in addressing 

global challenges. This inaugural edition of the Global Compact International Yearbook 

shows how companies around the world are making an impact and fostering positive 

change. 

Ban Ki-moon, UN Secretary General 

No consideration of sustainability or responsible business can avoid the defining issue 

of this generation. It is fitting, therefore, that the Yearbook – which was developed and 

produced entirely by Global Compact participants – devotes so much of its content to 

climate change. In December 2009, governments will convene at the United Nations 

Climate Change Conference in Copenhagen to negotiate a new comprehensive climate 

change agreement. Business will have a major role to play – through innovation, 

investment, technology transfer and advocacy. 

One underlying message of this Yearbook is that a global, low-carbon economy is not 

only technologically possible, it makes good business sense. I hope the perspectives from 

science, public policy and business presented in this publication can convince more 

companies of the urgency of action and the practical benefits such action will have for 

both the natural and business environments. We need the voice and energy of business 

to help us combat climate change. 

Since its launch in July 2000, the Global Compact has grown to become the world’s 

largest corporate sustainability initiative. Its more than 6,000 business participants 

in nearly 140 countries strive to implement universal principles in the areas of human 

rights, labour, environment and anti-corruption. They have undertaken hundreds of 

projects in health, education and infrastructure around the world, and have generated 

important momentum for building a more equitable and sustainable future for all. This 

Yearbook documents these efforts. I commend it to a wide global audience 

” 

and encourage all readers and stakeholders to do their part in supporting 

the Global Compact. 

Global Compact International Yearbook 2009 3

The Politics of 

Climate Change 

Bitte Leadtext einlaufen lassen! 

4 


Agenda 



By Sir Anthony Giddens 

It is an important year, and everybody knows it because it is 

the year of Copenhagen. It’s a key for climate change policy. I 

do hope the Copenhagen negotiations will be successful, but 

there are reasons I have to be worried. 

What are the reasons that I have worries? Well, first of all, when 

you have two hundred nations to agree on something, they 

can often only agree on a very low level. That’s exactly what 

happened with Kyoto: They agreed on really quite inadequate 

targets. This may not happen this time. 

Second, obviously there are no methods and no means of enforcement 

in the international community for countries that do 

not live up to their obligations. There are no strong mechanisms 

of enforcement in the international community. For serious 

issues, we have no international regulations at all. 

Thirdly, even if significant agreements are reached in Copenhagen, 

they have to be enforced. It’s not enough just to say 

what we are going to do: The crucial issue facing all of us in 

climate change is how we are going to do the things that we 

say we want to do. 

In truth, what is going to happen in respect of climate change 

in the world’s future will depend on the industrial countries. 

The industrial countries under any Copenhagen bargain have 

to take the lead in radically reducing their emissions, not just 

in the longer term, but in the short term, too. 

There is a gap much larger than that between what seems to 

be a potentially cataclysmic future – which in fact is a danger 

for the future of world society – and the lack of response from 

the majority of the public, not only in the industrial countries, 

but to a slight degree in most of the world. What accounts 

for the size of this gap? I have a theory, which to me sort of 

faces the political problems of climate change. That theory 

I called “Giddens’s Paradox”. “Giddens’s Paradox” says that 

climate change is an issue we never had to deal with politically 

before, not just because of its global scope but because 

it’s politics of an abstract future, mediated by scientific items. 

We never had to confront the issue politically, nor has any 

other civilization entreated so fundamentally upon nature as 

our civilization, for better or worse, has done. 

Now climate change is a substantial future threat, but it is 

not visible in the course of daily life, so you have to get at 

it through some optic representation in the melting of the 

Arctic icebergs or whatever. For me, that’s the reason why the 

majority of the public ignores such an issue. Climate change 

simply does not impinge on most people’s everyday concerns. 

Moreover, survey material shows that climate change in the 

public is simply one among many other potential cataclysms. 

We are all experiencing the possible swine flu, and there are 

always announcements of other possible pandemics. Catastrophe, 

global catastrophe, is never far away, and it’s hard for 

the members of the ordinary public to disentangle that. 

The paradox lies in the fact that, if we wait until climate 

change does become visible in people’s lives, especially in 

people’s lives in the industrial countries, it will be by definition 

too late. If we wait, we are lost because there is normally 

no way of getting the emissions out of the air once they are 

there. The longer we wait, the more emissions will be in the 

air and the more impossible it is to cope with the problem 

except by adapting to it. That’s the reason I think why so many 

members of the ordinary public are climate-change sceptics. 

It’s a very convenient position to adopt if you want to put it 

out of your consciousness. 

In the majority of the industrial countries, over 40% of the 

population are climate change sceptics. On the other side, only 

one percent of scientists are climate change sceptics. So you 

can see what a difficult political issue it is. It’s partly for this 

reason that I came to the conclusion that we don’t really have 

a politics of climate change. We don’t really have a developed 

account of how we are going to handle such an unusual, 

unique issue in the context of the democratic institutions of 

industrial countries, where it must be handled. 

I’ll just shortly drop four points: First of all, we have to disentangle 

Green politics and the idea of being Green. Environmental 

politics is quite distinct from the climate change issue and 

the problems that climate change poses for us. The two have 

become wrapped together partly because of the influence of 

the Green movement in bringing climate change to the attention 

of the population. But controlling emissions has not 

very much to do with a large amount of what is constituted 

by Green values and Green interests and Green concerns. Climate 

change is a serious threat, which of course is on top of 

other threats to the world’s resources, but we must entangle 

this threat in a direct way, and we have to find an adequate 

conceptual thinking. 

Secondly, we need to reduce the transformation on politics. 

We must develop a politics of the long-term, because we 

don’t have yet a politics of the long-term. In industrialized 

democratic countries, we have no instruments to deal with 

long-term issues, partly because of the impact of the era of 

deregulation, which is hopefully over. But when we are dealing 

with climate change, we have to work on a thirty-year cycle. 

6 


Agenda 


I like President Obama’s interventions – whatever happens 

when progress is made through Congress – is that he does 

have a sense for rational politics. There are only a handful of 

other politicians in Europe who have to some extent achieved 

this. Meanwhile, the European Union has taken above all a 

regulatory approach. 

Fourthly, if you follow the consequences of Giddens’s paradox, 

it shows that we are probably not getting too far just by 

scaring people; partly because there are many things we are 

frightened of, partly because what we are asking them to be 

frightened of is an abstract future. Therefore, we have to look 

for a revolution in our approach to climate change issue: 

• which looks much more to positives, 

• which has an inspirational quality, 

• which sets out a kind of society we would like to achieve, 

not that kind of society we want to avoid, 

• which sets out a positive view of the future, 

• which recognizes that there are costs to be born in a changing 

of consumption patterns that has to be made, but in the 

same time also focuses on benefits, also focuses on maturities; 

also focuses upon a positive noble vision of the society we’d 

like to create. 

This means reintroducing these issues into politics after decades, 

like the return to the idea of planning. You can’t count 

on a future unless you have a perspective for that future that 

implies a long term view of what we want to achieve. The 

return to planning is not a return to top down. With the 

public opinion towards climate change, state intervention is 

vital, but only in conjunction with grass-roots initiatives. You 

need the state and the government to encourage all sorts of 

bottom up initiatives from civil society groups and others. But 

you can’t deal with climate change in a short-term phase of 

democratic politics without having a longer time perspective, 

and that is not going to be easy to create. 

Third, and important to creating a long-term perspective, 

is to pull climate change away from the left-right division. 

It’s a very unfortunate fact that in many of the developed 

countries climate change has become politically polarized 

between left and right. In order to confront climate change, 

you must get something of a consensus among at least a 

substantial proportion of a democratic polity or you are not 

going to generate support for your policies. In my view, the 

left has a special responsibility and has to give up claiming 

climate change as its issue. We should no longer say such 

things as “Green is the new Red”, because that immediately 

polarizes political opinion on the right. One of the reasons 

Apparently, my argument is that we need at this point something 

very different from what the Third Way meant; we need 

a good dose of utopia back in our politics. We need to think, 

what will be the lock on implications of moving towards a 

low carbon economy. Many people think there will be an 

economy just like the existing economy, the industrial one, 

where everything else stays the same, except we are producing 

lower emissions. That is not remotely conceivable. We 

have to think through a whole morass of implications on an 

economic level. 

And we have to think what kind of society should prevail in 

this world and how we’d like to achieve it. It’s a simple matter 

of that. When Francis Fukuyama spoke of the end of history 

he must have been wrong, because Fukuyama said we won’t 

invent new forms of society. Indeed: We have to invent a different 

form of society, because our way of life is unsustainable, 

strictly in climate change patterns. 

Source: Transcription of Lord Giddens 

presentation of his new book „The Politics of 

Climate Change“ in Essen/Germany in June 

2009. Set by Lisa Dahlheimer. 

Author: Lord Anthony Giddens is former 

Director of the London School of Economics 

and Political Science (LSE). 


Road to 

Copenhagen: 

Viewpoints 

8 


Agenda 


Paul Dickinson, 

1 

CEO at the 

Carbon Disclosure Project 

The private sector will be the source 

of almost all of the funds required for 

the transition to a low-carbon economy, 

and the creation of new and radically 

different infrastructure and energy systems. 

The challenge for governments is 

to realign financial signals so that lowcarbon 

solutions are the obvious choice 

for investment decisions. 

There are various means that governments can use to drive 

investment patterns, ranging from regulation and choice editing 

through to subsidies and fiscal incentives. Governments 

can also intervene directly in the market through large-scale 

public procurement. These actions can be conducted at the 

national level or under international agreements. However, 

none of them can be carried out effectively without consistent, 

comparable data on the carbon intensity of companies, 

products, and activities. 

Reduction Commitment). These requirements are not yet linked 

or consistent, which will create a heavy reporting burden for 

companies and also means that comparability may continue to 

be an issue for investors. We need to move to the next phase: 

towards global consistency. 

A strong precedent has been set by the development of international 

financial reporting standards. Full international 

adoption of these has taken many decades, but the world 

is now well-placed to accelerate creation of their climatechange 

reporting equivalent. Important work is being done 

to enable this to happen, for example by the International 

Accounting Standards Board, the International Auditing 

and Assurance Standards Board, and the Climate Disclosure 

Standards Board. 

These efforts are relevant to many aspects of the Global Deal 

framework now under discussion by governments, for example 

to MRV (measurable, reportable, verifiable), international 

capacity-building, and sectoral action. They also act as a bridge 

between the world of government negotiations and the world 

of the companies and investors, who will put the necessary 

changes into action. It is crucial that these two worlds can 

find ways to communicate on each others terms in order to 

better work together to fight climate change. 

Governments must prioritize and promote the development 

of the key factors that allow this to happen – reporting, 

accounting, and assurance. The Carbon Disclosure Product 

(CDP) is working towards greater data comparability between 

companies and creating a global reporting standard 

for carbon through our work with the Climate Disclosure 

Standards Board. We are frequently told by companies and 

investors that one single standard will be very important 

in driving effective action on climate change. That message 

was repeated in recent CDP research, which was conducted 

with the AEA and detailed what global businesses need from 

governments. 

This is not simply a question of quantitative emissions reporting, 

although this is, of course, vitally important. Financial 

institutions looking to invest, for example, need to know 

more than emissions data – they require information about 

trends, risks, opportunities, strategies, performance, and 

corporate governance. They need to know about the future 

of an investment prospect, as well as its past and present. 

They need decision-relevant information using material and 

comparable data. 

We are halfway there. Corporate reporting regulations are 

proliferating all over the world, mostly requiring emissions 

data but sometimes requesting more qualitative information, 

too (as with, for example, the United Kingdom’s new Carbon 


James P. Leape, 

Director-General of WWF 

International 

2 

Climate change is the greatest environmental 

challenge the world has ever 

faced. It has the potential to also be the 

greatest developmental, social, health, 

and security challenge – if unchecked, 

global warming could potentially create 

hundreds of millions of climate refugees 

as coastal areas are flooded, crops 

fail – causing greater food scarcity – and water supplies dry 

up. It is a threat that will affect us all, irrespective of where 

we live. As Archbishop Tutu said, climate change is “totally 

indiscriminate of race, culture and religion.” 

When the world’s leaders meet in Copenhagen at the end 

of this year to agree on a deal to replace the ageing and 

ineffective Kyoto Protocol, they must come up with a bold 

response that can put the world on a track to a low-carbon 

economy. 

Attainable goals 

The truth of the matter is that these changes are well within 

our reach. In January of 2009, McKinsey & Co. presented a 

rigorous assessment of the costs of abating climate change 

– a report that was sponsored by WWF and several other organizations. 

Mapping out the solutions for every sector of the 

economy in every region of the world, the McKinsey analysis 

makes several critical points. 

McKinsey’s analysis shows that it is possible, with proven 

technologies, to reduce global emissions to a level that is likely 

to keep global temperatures from rising more than 2°C. It also 

shows that the cost is manageable. Full implementation of 

all the measures assessed by McKinsey would cost less than 1 

percent of global GDP – challenging, to be sure, but far, far 

less than the cost of inaction, which Lord Nicholas Stern has 

estimated to be from 5 to 20 percent of global GDP. 

The McKinsey analysis also makes it very clear, however, that 

we can succeed in meeting the challenge of climate change 

only if we utilize the full potential of all the measures available 

to us. Success requires bold action in every sector of the 

economy – from power to transportation to forestry – and in 

every region of the world: across the industrialized countries, 

of course, but also the emerging economies and the major 

forest regions. The McKinsey study further demonstrates that 

success is only possible if we find a way to move very quickly 

– every year of delay makes the solution more difficult and 

more costly. And every year of delay locks in another 5 parts 

per million of CO2 in the atmosphere. 

Challenging times 

To be sure, these are challenging times – countries all over 

the world are struggling to deal with a global recession. But 

that recession cannot – and need not – delay action on 

climate change. The recovery will not succeed if we rebuild 

the fossil-fuel-dependent economy, which is vulnerable to 

the volatility and inevitable escalation of oil prices, and the 

growing impacts of climate change. To be sustained, the new 

economy must be low-carbon and built upon the energy solutions 

of the future, not the past. The trillions of dollars of 

stimulus now being pumped into the global economy thus 

provide a crucial opportunity to lay the foundation for that 

low-carbon future. A massive public investment in critical 

infrastructure – from “smart grids” that facilitate reliance on 

renewable energy technologies, to public transit and green 

buildings – can open up huge opportunities for innovation 

and for creating new markets. 

Building-blocks of a sustainable future 

Climate change is, of course, a truly global challenge – it 

threatens the future of every person and community on 

the planet, and it can be solved only if we find a way to act 

together. The UN negotiations that culminate in Copenhagen 

this December are thus of the highest importance. In 

those negotiations, the countries of the world must agree 

on a global deal that includes several basic elements. The 

global deal must establish measures that will ensure that 

total global emissions of greenhouse gases peak and begin 

to decline by 2020, and it must set the world on a course for 

reducing emissions to 80 percent below 1990 levels by 2050. 

Those are the targets necessary to prevent the planet from 

warming more than 2°C. 

Achieving those targets will require industrialized countries 

to greatly reduce their emissions to levels that are 25 to 40 

percent below 1990 levels by 2020. It will also require that 

emerging economies like China and India find ways to slow 

the increase in their emissions even as their economies grow, 

and that forest countries take action to curb deforestation. It 

is thus essential that the agreed framework provide for cooperation 

in developing and sharing technology, and establish 

robust financing mechanisms to support measures to reduce 

emissions from energy production and deforestation in the 

developing world. 

Finally, a global agreement will have to recognize that, even 

if we act boldly to bring climate change under control, we 

will still suffer significant impacts, and that the world must 

10 


Agenda 


Beyond 2012 – The 

World Food Programme's 

Perspective 3 

provide the resources that will allow developing countries 

to adapt. 

Climate change will not wait 

we see that 

responsibility 

and long-term 

strategies pay off 

in the end. 

A strong Copenhagen agreement can be the cornerstone of a new 

global economy – an economy that offers huge opportunities 

for new industries and new jobs; an economy that can, in fact, 

protect the climate on which we all depend. We know that we 

have the technologies and the financial means to move onto 

that path. What we need now is the political will. 

Climate is a key parameter in growing food. Changes in climate 

pose a threat to agriculture and can lead to drastic increases 

in food insecurity and hunger. Climate change will affect 

everyone, but it has a disproportionate effect on those living 

in poverty in developing countries in areas where deprivation 

and vulnerability to climate risks and natural disasters are 

severe. Studies warn of a coming “global food crunch” with 

long-term drivers of climate change, scarcity of land and 

water, lack of investment in agriculture and fuel production, 

and rising food consumption due to population growth all 

combining to cause political instability. 

As the world’s frontline organization in the fight against 

hunger, the UN World Food Programme (WFP) will be in even 

greater demand in helping communities that are affected by 

recurrent natural disasters adapt to climate change. Sophisticated 

and innovative tools – such as the WFP Vulnerability 

Analysis and Mapping, Early Warning Systems, Emergency 

Needs Assessments, and Weather-based Insurance – are 

essential adaptation instruments to anticipate the onset of 

natural disasters and allow for protective measures to be 

put in place. 

Presence in and knowledge of the affected areas is key to determining 

disaster prevention and taking appropriate measures. 

WFP’s extensive deep-field presence in places where deprivation 

and vulnerability to climate change and natural disasters 

are severe gives an advantage in operationally strengthening 

resilience. The operational base of WFP consists of: 74 country 

offices and 270 sub-offices, an overall presence in 91 countries 

worldwide, and 10,200 employees, of which 91 percent are 

engaged in field operations. 


WFP is prepared for climate-related shocks and emergencies. 

As a leader of the Global Logistics Cluster, WFP supports UN 

agencies in emergency preparedness and response mechanisms. 

WFP manages five UN Humanitarian Resource depots 

in Italy, Ghana, Panama, Malaysia, and Dubai for more than 

30 humanitarian organizations that use this network in the 

various locations for storage of emergency stocks. The depots 

are stocked with standardized relief materials and are geared 

to ship essential relief supplies wherever needed within 24 

to 48 hours. 

The vision of an economy based on low-carbon incentives and 

“Green Growth” will only succeed if global partnerships and 

common framework agreements manage to bring adaptation 

in the least developed countries to the forefront. WFP has itself 

started to reduce its carbon footprint in its offices around the 

globe and to mainstream climate adaption activities into all 

of its programing areas. WFP will be engaging governments, 

the private sector, and civil society to also implement innovative 

solutions to reduce the impact of climate change and its 

effects on food security and hunger. 

Björn Stigson, President 

of the World Business 

Council for Sustainable 

Development 

4 

When the world’s governments meet in 

Copenhagen in December, their representatives 

will be dealing with an unprecedented 

level of change in two interwoven 

areas: climate and the economy. This 

massive pressure for change is leading 

to what I believe is a new industrial 

revolution, one that has the potential to 

dramatically reshape the world we live in. That pressure will 

remain, no matter what global leaders decide in Copenhagen. 

Sustainable solutions to the complex problems we are facing 

will require government and business to cooperate on a level 

never seen before. 

The time for short-term solutions is behind us. The global recession 

must not be used as an excuse to forget about the future. 

It is clear that we must revive growth in the world economy 

and imperative that we do this in a low-carbon way. We need 

to find ways of working – and of thinking – that align the 

needs of development, the economy and the world’s climate 

and find solutions that work for all three. Globally responsible 

business is continuing to work to find climate solutions, 

address the water crisis, stem biodiversity loss and work with 

the poor to assist in providing sustainable livelihoods. 

But how we use and source energy in the future will be critical. 

The new industrial revolution will see a surge in green 

jobs; indeed, one estimate says 20 million could be created 

in renewable energy alone, far more than would be achieved 

with fossil-fuel-based energy. Clearly, there will be opportunities 

for some businesses in this revolution, just as there will 

be losses for others. 

Energy is essential for industry – to power infrastructure and 

to connect goods and services to markets. It is also essential 

for development. Energy shifts the quality of people’s lives 

enormously; it is the single largest requirement for economic 

growth and social development. Currently about 1.6 billion 

people have no access to electricity, and it will be difficult to 

improve their lives significantly without it. But more people 

with electricity must not mean more greenhouse gas emissions. 

Energy efficiency is widely accepted as the most cost-effective 

way to mitigate climate change. Fully 50 percent of the potential 

to cut greenhouse gas emissions in half by 2050 is expected to 

come from increased energy efficiency. The climate solution 

therefore requires us to quickly improve energy efficiency, to 

develop low-carbon energy sources and to find breakthrough 

technologies and put them to work. 

We now need long-term leadership, governments that put 

the future ahead of the present. Sustainability must be at the 

top of the list for world leaders. Governments clearly have a 

difficult task ahead of them, but business is ready and willing, 

also in this period of global economic crisis, to contribute to 

climate-change solutions. 

At the World Business Council for Sustainable Development, 

we have been working with business for 15 years to find sustainable 

ways to achieve economic growth. We will continue 

to do this, regardless of the outcome of the United Nations 

Climate Change Conference in Copenhagen. Our member 

companies will continue to invest in the innovation needed, 

to find and develop new products, services and technologies 

that the world will need as it faces the joint challenge of 

greenhouse gas reduction and economic growth. One example 

of this is our recent publication of a ground-breaking report 

12 


Agenda 


Transforming the Market: Energy Efficiency in Buildings. This 

report, the result of a $US15 million investment and four 

years of research, shows how energy use in buildings can be 

cut 50 percent by 2050. 

Business knows it will have to provide the lion’s share of 

the huge investment that will be needed. But to do that it 

needs: 

• The right policy framework. This must be transparent, predictable 

and long-term, allowing business to understand the 

risks as fully as possible before investing. 

• Developed countries need precise intermediate targets for 

2020-2030 to allow them to measure and adapt if the world 

is to reduce CO2 emissions 50 percent by 2050. Yes, huge 

investments are called for in energy, urban infrastructure, 

water, transport and food supplies, but we must make 

sure these investments remain aligned with a sustainable 

future. 

• Solutions must identify ways to share the burden fairly so that 

all parties can and will commit to them. We need to ensure 

that all industrial sectors, the financial world, developing 

and developed countries with their national concerns and 

many others have their needs taken into consideration so 

they are willing and able to cooperate. 

• Rapidly emerging economies should be considered separately 

and in a distinct fashion. 

• National policies must be suited to national circumstances. 

• Actions in developing countries will be effective only if 

programmes are put in place to build up infrastructure and 

develop skills and those programmes are accompanied by 

an allocation of resources. 

Many questions and issues remain, but we cannot allow these 

to block our path to a new climate regime. For example, we 

need to identify market mechanisms that will create a price 

for carbon that takes into account its true cost. We need to 

understand how to scale up energy efficiency globally. An 

energy-lean economy: What does it look like and what technologies 

and policies will help create it? We need jobs in clean 

energy, but how do we get investment flowing into it? 

The world after 2050 will be different, and the changes that get 

us there will be transformational. But there is no alternative 

to making those changes. We need to build a more sustainable 

society with lower energy and resource use. Whatever 

happens in Copenhagen, this need will remain. How we live, 

do business and earn our living – the lives we will have in 

the future – all depend on what we do now to handle this 

need. 

Lila Karbassi, 

UN Global Compact Issue 

Manager, Environment 

5 

United Nations Secretary-General Ban 

Ki-moon has called climate change “the 

defining challenge of our time” – for 

good reasons. Climate change is the most 

pressing and disruptive issue the world 

is facing today. It affects every aspect of 

society, from energy resources and water 

sustainability to public health, food 

security, and even human security. 

Despite – or perhaps even because of – the global financial 

crisis, there is no time to delay action on climate change. There 

is only a very short window of opportunity, which requires 

all social actors to become part of the solution to this global 

threat. Greenhouse gas emissions that contribute to global 

warming must be cut with no further delay. 

This year, crucial government negotiations will be held at 

the UN Climate Change Conference (COP15) in December in 

Copenhagen. The goal is to forge a new global framework on 

climate change, one that will be an effective successor to the 

Kyoto Protocol, which expires in 2012. Ultimately, much will 

depend on the positions of the United States and China, the 

globe’s biggest generators of greenhouse gases, who together 

account for nearly half of all emissions. 

As a key stakeholder in the global climate debate, the business 

community has a critical role to play and many businesses 

have been mobilizing for some time. What is needed now is 

a strong signal from business that will give governments the 

confidence needed to negotiate a strong deal with ambitious 

emission reduction targets at COP15. 

It is in this context that the Copenhagen Climate Council – 

in cooperation with the UN Global Compact and a group of 

partners – convened the World Business Summit on Climate 

Change from May 24–26, 2009, in Copenhagen. The Summit 

brought together over 650 business leaders, government officials, 

and NGO representatives from around the world to put 

forward a set of recommendations for the December negotiations. 

The Summit was opened by the Secretary-General, who 

challenged business leaders to “put themselves at the forefront 

of an unprecedented effort to retool the global economy into 

a cleaner, greener, and more sustainable economy.” 

The Summit was an effective forum for showing how the private 

sector can address the climate challenge through financ- 


ing, development, and deployment of low-carbon solutions. 

At the same time, there was consensus that business needs 

regulatory certainty to unleash its full potential – certainty 

that only governments can provide. 

The Summit resulted in “The Copenhagen Call”, a strong 

statement urging political leaders everywhere to agree on an 

ambitious and effective global climate treaty at COP15. The 

Call further outlines the elements that business leaders believe 

are necessary for a new treaty. 

As we move closer to COP15, many businesses have emerged as 

climate champions and leaders by putting effective mitigation 

and adaptation strategies into place, driving innovation, and 

putting pressure on their governments to act now. However, 

climate leaders represent only a small portion of the business 

world that has made climate change a top priority. Many businesses 

are still sitting on the fence and waiting for others to 

take the initiative. Unless more businesses begin to lobby vigorously 

for a climate agreement in the months ahead, chances 

are slim that governments will seal the deal in Copenhagen. 

And the consequences of failure would be devastating: for the 

planet, for society, and for business. 

The good news is that there are effective fora that have helped 

galvanize the voice of business. The Global Compact’s own 

Caring for Climate initiative – launched by the Secretary- 

General in July 2007 – is a voluntary and complementary 

action platform for Global Compact participants who seek to 

demonstrate climate leadership. Caring for Climate provides a 

framework for business leaders to advance practical solutions 

and help shape public policy as well as public attitudes. The 

more than 350 chief executives in 65 countries who support 

Caring for Climate are prepared to set goals, develop and expand 

strategies and practices, and to publicly disclose emissions as 

part of their existing disclosure commitment (COP) within the 

Global Compact framework. 

Carlos Minc Baumfeld, 

Brazilian Environment 

Minister 

6 

Brazil’s position on global warming is extremely 

clear: We want the country to take 

on a leading role amongst the nations that 

are now dealing with this phenomenon, 

which has been named one of the most 

worrying for future generations. 

Recently, in a ministerial consultation 

on climate change, which took place during the 25th session 

of the United Nations Environment Programme Governing 

Council/Global Ministerial Environment Forum held in February 

in Nairobi, Kenya, we argued that a commitment must 

be made between developed and developing countries so that 

bolder goals for reduction of greenhouse gas emissions can 

be established. 

Dubbed the “descending carbon spiral”, the Brazilian proposal 

is based on common but differentiated responsibilities for 

developed and developing countries in addressing climate 

change – based on funding and technology transfer to developing 

countries – so that an international agreement may 

More information on Caring for Climate: 

www.unglobalcompact.org/Issues/Environment/Climate_Change/ 

14 


Agenda 


be reached at the United Nations Framework Convention on 

Climate Change, to be held in December 2009 in Copenhagen, 

Denmark. New standards for the second commitment period 

of the Kyoto Protocol are expected to be established during 

this high-level meeting. 

According to the proposal, developed countries should commit 

to bolder goals for greenhouse gas emissions reduction 

and design mechanisms for an over €100 billion fund aimed 

at financing mitigation and adaptation activities in regions 

that will be most affected. 

Presently, the richest countries in the European Union have 

adopted a maximum 20% reduction goal by 2020, which could 

eventually be broadened to 30% if developing nations also commit 

to reductions. Nonetheless, we consider this a timid goal, 

since the UN’s Intergovernmental Panel on Climate Change 

(IPCC) itself recommended that rich countries should reduce 

their emissions by 40% by 2020 in order to avoid imminent 

environmental disaster. 

We strongly defend the “descending carbon spiral”, because 

it assumes an international common but differentiated commitment 

to fight global warming. Initiatives carried out 

by developed countries, together with resources from the 

above-mentioned climate fund and partnerships for technology 

transfer, must be followed by meaningful mitigation 

and emissions reduction outcomes in developing countries. 

Therefore, developed and developing countries would rely on 

one another to obtain desired results. 

The Brazilian initiative is also based on a proposal presented 

by us last year during the UN climate change meeting held in 

Poznan, Poland. Commended both by UN Secretary-General 

Ban Ki-moon and by the US ex-vice-president Al Gore, the 

National Plan on Climate Change establishes a Brazilian commitment 

to reduce illegal logging in the Amazon Rainforest 

by 70% by 2017. This is clearly an ambitious goal, since in 

Brazil forest burning and deforestation represent around 75% 

of national CO2 emissions. 

Furthermore, rich countries would have to commit to contributing 

to this climate fund around 10% of the total value of 

annual transactions related to clean development mechanism 

(CDM) projects and 10% of the profits from the production 

and trading of oil and coal. These resources would be applied 

to immediate greenhouse effect mitigation actions as well 

as to activities for adaptation by affected regions and forest 

preservation. Funds would be invested in programmes within 

countries which reduced deforestation and preserved forests 

or created new protected areas. 

The basic idea behind this climate fund account is to stimulate 

developing countries that still harbour forests to preserve them 

or expand their coverage. To this end, a value per hectare of 

forest would be proposed in due time. 

So, actions proposed in Nairobi could be funded by the establishment 

of this general international climate fund – which 

could initially be fed by various sources, such as the carbon 

market and taxes on oil trading. Together, these initiatives might 

free the world from the present deadlock which threatens it, 

turning the United Nations Framework Convention on Climate 

Change in Copenhagen into a pact for the decarbonization of 

global economies and, ultimately, for saving the planet. 

Getting in the Lead? 

The position of 

the European Union 7 

The pledge to reduce greenhouse gas emissions in the European 

Union (E.U.) by 20% from 1990 levels by 2020 has been half 

fulfilled at present: emissions of all E.U. countries are currently 

at around 12% under the 1990 average. E.U. environmental 

commissioner Stavros Dimas has admitted that a large part 

of the reduction can be attributed to warm weather, however. 

Transport emissions rose by a quarter and household savings 

were not much either. But Stavros Dimas seems optimistic and 

has stated his confidence that the E.U. will reach its climate 

goals or even exceed them. 

An important item of the E.U. climate and energy package is 

the increase in the proportion of renewable energy sources 

used in overall energy consumption to 20% by 2020. National 

energy targets should be introduced for this purpose; these 

can vary greatly between countries. For example, Sweden 

needs to reach a proportion of 49%, whereas Malta must only 

achieve 10%. At the same time, the proportion of biofuels in 

overall petrol and diesel consumption should increase to at 

least 10% by 2020. Along with the reduction of emissions, 

the E.U. aims to decrease dependence on petroleum, natural 

gas and coal imports by promoting renewable energy sources. 

Another important element of the package is the reduction of 

emissions by power stations and energy-intensive industries . 

The introduction of a transnational emissions trading system 

should take these emissions down 21% from 2005 levels. The 

promotion of carbon dioxide capture and storage technologies 

will also figure prominently. 


The package of climate and energy measures that has already 

been adopted by the E.U. is anticipated to take effect in 2011. 

The E.U. is prepared to increase its CO2 reductions target from 

20% below 2020 levels to 30%, as long as other industrialized 

nations commit to comparable decreases. Even though this 

may make the E.U. a pioneer, it is still far less than what is 

necessary, according to environmentalists. Antje von Broock, an 

expert from the Friends of the Earth Germany environmental 

network, urges the E.U. to give primary support to developing 

nations' work on climate change, stating that industrialized 

nations must provide 40 billion euros annually toward 

climate protection in developing nations. The E.U. must take 

on a third of that. 

Climate Change in 

Down Under – 

"The worst global recession since the Great Depression means 

we must adapt our climate change measures but not abandon 

them", said Prime Minister Kevin Rudd in May 2009. Emissions 

measures in Australia have been delayed as a consequence 

of this adaptation. The original government action plan for 

reducing pollutant emissions nationwide called for measures 

on emissions in 2010; the new target is 2011. Citizens' action 

groups in Australia, such as the Bayside Climate Change Action 

Group, have accused Australian Prime Minister Kevin Rudd 

of breaking his election promises. 

Another item concerns agriculture in Australia, where sustainable 

practices to reduce pollution should also be promoted. 

The government hopes that implementing these measures will 

not only protect the environment, but create new jobs as well. 

As the Minister for Climate Change and Water, Senator Penny 

Wong, put it, "the Australian Government Climate Change 

Strategy provides the long-term framework and confidence 

required to create the new jobs and business of a low pollution 

future". 

The Australian Position 8 USA: 

A study by the Oxfam charity says that a fair agreement on 

climate change would mean that Australia must reduce 

emissions by 34 per cent by 2020. Until now, however, the 

government has offered only a 25 per cent reduction. The 

government has allocated 15 billion dollars to implement 

its climate strategy, in which investments in renewable 

energy sources and the research and development of new 

technologies figure prominently. By 2020, 20 per cent of 

the electricity should be generated by renewable energy 

sources. It should be possible for private households as well 

as corporations to implement these technologies at reasonable 

cost and receive the corresponding guidance in using 

them. They will receive low-interest loans or discounts on 

investment in energy-efficient home insulation, solar panel 

installations, or rainwater cisterns and water recycling, just 

to name a few. 

From the laggard to the 

pioneer? 9 

“We’re back in the game,” said Secretary of State Hillary Clinton, 

and meant that the USA was “ready to lead and determined 

to make up for lost time” on international climate protection. 

With this approach, the administration of Barack Obama has 

clearly distanced itself from the position of the previous US 

administration and signaled a turnaround in the country’s 

climate policy. The Obama Administration clarified this backsliding 

with the release of a new report on climate change. 

16 


Agenda 


"It is clear that climate change is happening now," John P. 

Holdren, director of the White House Office of Science and 

Technology Policy, said. 

In the run-up to the Copenhagen Climate Summit in December, 

the USA is on the offensive: At the UN conference in Bonn, 

it presented its own recommendation for a new climate protection 

agreement. The USA is striving for a “comprehensive 

agreement”, says the head of the US delegation, Jonathan 

Pershing. The industrial countries should reduce their CO2 

emissions 80 percent by 2050. But specific recommendations 

for medium-term reduction goals were not presented. What’s 

new about the proposal is, the USA is no longer demanding 

that threshold countries, such as China, commit to specific 

CO2 reduction goals. The economically stronger developing 

countries should also make contributions, but these could 

look different case by case, says Pershing. The proposal is 

an update of the UN Climate Convention, which was agreed 

on in Rio de Janeiro in 1992. Environmental organizations 

expressed criticism of the US proposal. "The USA wants to 

abandon Kyoto completely," says Greenpeace. But that would 

cause important elements of climate protection to fall away, 

such as mandatory adherence to commitments. "That would 

be the end of an effective Copenhagen agreement." 

At the national level, too, the US government has presented a 

plan for a new start in environmental policy with its "American 

Clean Energy and Security Act of 2009", but this hasn’t 

been passed yet. The proposed law would reduce greenhouse 

gas emissions to 17 percent below the 2005 level by 2020. 

Originally, a goal of 20 percent was even being considered. 

In addition, the bill recommends for the first time a national 

emissions trading system, which would start in 2012. But massive 

resistance in the US Congress threatens to tie the hands of 

the US government internationally, warns Todd Stern, the US 

government’s Special Envoy for Climate Change. In contrast, 

Steven Chu, US Energy Secretary, emphasizes the USA’s work 

at various levels, such as efforts to achieve cooperation with 

China on climate protection. 

Beyond the proposed law, the US government for the first time 

has introduced tougher rules nationwide for fuel economy and 

exhaust emissions from motor vehicles. The goal is to save 

almost two billion barrels of oil and cut emissions 30 percent 

by 2016 through new, environmentally friendlier automobiles 

and small trucks. As a result, the CO2 emissions would be 

reduced by 900 million tons. Further, the US government is 

considering following the European model and paying car 

owners a premium for trading in their high-fuel-consumption 

used cars for new, more environmentally friendly models. 

President Obama labels his government’s current climate 

protection plans a "historic step." 

China: The right to 

development 10 

"Climate change is an environmental issue. But ultimately, it 

is a development issue." The negotiations for a new climate 

protection agreement must therefore follow the principle of 

"common but differentiated responsibilities", says Chinese 

President Hu Jintao. Regarding the post-Kyoto climate agreement, 

China is pushing for continuity: The Chinese government 

demands that the rich industrial countries commit to reduce 

global CO2 emissions and fulfill their obligations on technology 

transfer and financial support to developing countries. In 

addition, China calls for the rich industrial countries to reduce 

their emissions 40 percent by 2020. 

Further, in advance of the negotiations for a world climate 

agreement in December in Copenhagen, the Chinese government 

argued that some of the Chinese CO2 emissions from 

exported goods should be allocated to the industrial countries, 

that is, to the consumers of the goods. Chinese Premier Wen 

Jiabao added, it would be difficult for China to commit to 

CO2 emissions-reduction goals for the period between 2013 

and 2020, since the country was still in an early stage of development. 

But China will work to expand renewable energy 

production and increase energy efficiency. 

The Chinese government has worked out an action plan against 

climate change in which it will raise the share of regenerative 

energy to ten percent of total energy consumption. "China has 

a 1.3 billion population, and in terms of per capita greenhouse 

gas emission, we are certainly not the biggest one, yet we are 

still very active and positive about our cooperation with Europe 

in terms of saving energy, reducing pollution, developing a low 

carbon economy and developing those environmentally friendly 

technologies," says Wen Jiabao. China is already holding talks 

with the USA on more intensive cooperation in developing 

"green technologies". Experts believe these talks could result in 

a treaty ready for signature by autumn 2009. While the treaty 

will not include CO2-reduction goals for China, it will set clear 

and implementable energy efficiency goals. Priority should be 

given to further development of carbon dioxide capture and 

storage (CCS) as well as work on more efficient automotive 

fuels. Both countries want to bring mature energy-efficiency 

technologies to the market faster. Also under consideration 

is a free trade area between China and the USA, limited to 

"clean" technologies. In the past, the Chinese government consistently 

argued that accelerated transfer of climate protection 

technologies was a central prerequisite for the success of the 

international climate protection negotiations in Copenhagen, 

Denmark, at the end of 2009. 


Toward a Post-Kyoto 


Architecture: 

A Political Analysis 

18 


Agenda 


By Robert O. Keohane and Kal Raustiala 

Any international regime aimed at the mitigation of climate 

change must solve three problems. It must: (1) secure sufficient 

participation to be effective; (2) achieve agreement on rules 

that are meaningful, so that if they were followed, climate 

change would indeed be mitigated; and (3) ensure compliance 

with the rules. That is, it must solve problems of participation, 

effectiveness, and compliance. These problems require 

careful institutional design. The standard that should be applied 

to an institutional design such as that proposed in this 

chapter is whether, given a level of political commitment, it 

will increase the likelihood of a satisfactory solution to the 

tripartite requirements of an effective regime: participation, 

sufficiently strict rules, and a robust compliance system 1 . 

The attractions of a cap-and-trade architecture for 

participation 

The paper argues that only a cap-and-trade architecture is likely 

to make it politically possible to secure sufficient participation 

to get a climate-change mitigation regime up and running. 

Project-oriented mechanisms fail to send a comprehensive 

price signal to investors and governments; they incur very 

high transaction costs; and they require counter-factual determinations 

to assess additionality. Global carbon taxes would 

impose economic burdens on the industries of developing 

countries without offering the offsetting gains of being able 

to sell emissions permits under a cap that made allowance for 

their much lower historic and per capita emissions. It therefore 

seems unlikely that developing countries, including China 

and India, would agree to such an arrangement. 

Yet the task of negotiating a comprehensive cap-and-trade 

system will be daunting. Incentives for the most reluctant 

countries – or those that can bluff at being most reluctant – 

to hold out for a better deal would be very great. The option of 

beginning with a smaller “club” of major contributors to global 

warming plus any other states that chose to join or of linking 

various cap-and-trade systems should be maintained. 

1 

The paper summarized here is published in Joseph E. Aldy 

and Robert N. Stavins, ed., Post-Kyoto International Climate 

Policy: Implementing Architectures for Agreement (Cambridge 

University Press 2009). Our goal in that paper is to sketch 

such a design, particularly its compliance system, with careful 

attention to the realities of world politics. Please refer to that 

paper for all details and references; this is only a very brief 

summary. 

In short, we favor cap and trade as the basic approach, but 

do so cognizant of the many problems it faces. We are not 

confident that such a system will work. However, we think 

it has the best political prospects of any plausible climate 

system, and we believe that careful institutional design can 

help ensure feasibility. 

The political logic of a buyer liability system 

The fundamental problem of compliance in world politics 

is that it is virtually impossible to force powerful states to 

comply with international rules through a collective process. 

Rules that purport to ensure compliance lack credibility ex 

ante. Difficulties of enforcement yield two common outcomes 

with regard to international agreements. One is the negotiation 

of weak or vague international commitments that largely 

match existing behavior. This outcome is particularly common 

in the environmental realm, where agreements have often 

been struck that exhibit high compliance – because they are 

carefully tuned to the status quo – yet do little to influence 

actual change in behavior. An equally undesirable outcome is 

the negotiation of ambitious (but sometimes vague) rules that 

are frequently violated. When untethered to any meaningful 

monitoring and compliance system, ambitious international 

rules run the risk of substantial non-compliance. More specifically, 

there are at least three major political constraints 

on compliance provisions for a comprehensive cap-and-trade 

regime. Proposals that ignore these constraints will either not 

be implemented or will be ineffective if implemented. 

1| Post-hoc penalties on powerful sellers are infeasible. 

2| Any system that requires interstate negotiations to determine 

arrangements for compliance will be subject to political 

strategy and pressure. 

3| Any system that can be manipulated, or “gamed,” will be. 

The Kyoto Protocol contains unrealistic compliance provisions 

built around the idea of external enforcement. They open the 

door to renegotiations and exit threats and introduce a serious 

problem of moral hazard. 

We propose, instead, a system of “buyer liability,” based on an 

analogy with international bond markets. Firms and similar 

entities would be required to hold permits for the difference 

between their emissions and nationally set limits and would 

be authorized, at least to some amount, to purchase these 

permits from permit-holders in other countries. Buyers of 

emissions permits that do not represent the full amount of 

carbon reduction their face value implies – because their 

sellers did not keep their commitments – would need to 


purchase more permits or engage in further internal reductions. 

National governments would enforce this commitment 

against private actors within their jurisdictions. 

This system thus rests on the incentives of buyers, which 

will largely be in industrialized democracies, to comply with 

domestic emissions controls, and on the incentives of sellers, 

largely outside these states, to command and maintain the 

highest price in the market. It is therefore very important to 

note that the likely permit-short countries, in which enterprises 

will be net buyers of permits, on balance have stronger and 

less corrupt national legal institutions than the likely permitlong 

countries. Furthermore, the permit-short countries are 

overwhelmingly democratic. We therefore rely on internal 

structures and incentives, such as democracy and the rule of 

law, to ensure that permit-short countries comply with the 

system. Indeed, the political asymmetry – in rule of law and 

democracy – between buyer and seller countries is central to 

our advocacy of buyer liability. 

Especially now, 

we see that 


and long-term 


in the end. 

Our system is designed to generate endogenous incentives for 

compliance on the part of permit-long, or seller, countries. 

These governments will gain economically from maintaining 

a high value for the permits that their enterprises sell 

and will therefore seek to act in a way that maintains their 

reputation for compliance. This system, unlike many of the 

most prominent alternatives, provides “institutionalized 

transmission belts” for compliance to flow from the advanced 

industrial democracies, which have the strongest commitment 

to climate-change abatement, to the wide range of likely selling 

jurisdictions, which tend to have weak commitments to 

abatement. Details can be found in the paper. 

Buyers and incentives for prudence 

As in all cap-and-trade systems, under our proposal emissions 

permits would trade on public markets. Their value would 

depend on buyers’ ex ante estimates of validity. Shortly after 

the end of the year for which permits were issued, a comprehensive 

assessment would decide their value. In many 

respects, a buyer liability system is broadly akin to the existing 

international bond market. After being issued by states, 

bonds trade on international markets just as emissions permits 

would trade on such markets. Permits would trade at prices 

that reflect market participants’ confidence that they would 

be valid when they came due for redemption. They would 

likely trade at discounts if their validity was viewed as questionable. 

Buyers of emissions permits that were invalid, like 

buyers of bonds whose issuers default, will incur losses at the 

end of the process, and market prices will reflect prevailing 

expectations of eventual validity or invalidity. Like buyers of 

bonds, therefore, buyers of permits will have strong incentives 

to assess quality ex ante, price the permits accordingly, and 

hedge to some degree by purchasing excess permits. 

Accurate assessment and pricing are key to the smooth working 

of permit markets. If assessments ex ante are accurate, 

buyers can simply discount permits appropriately and buy 

more nominal permits than they require to meet emissions 

limits set by their governments. As in other markets, actors 

will hedge against risk. Insurance markets may also arise to 

cover the risk of permit invalidity. 

Sellers and incentives for validity 

If buyers bear the liability for invalid permits, what incentives 

do sellers have to ensure that the permits they sell are backed 

by real emissions reductions at the national level? Permits that 

lacked full validity would have a reduced value, with the loss 

borne by buyers that held the permits at that time. How would 

this give sellers incentives to follow the rules? 

20 


Agenda 


Under our proposal, governments of permit-long jurisdictions 

will seek to assure that the permits their domestic enterprises 

offer for sale are valid, because if they fail to do so, future 

permits from any enterprise within their jurisdiction will be 

devalued. Discounting all permits from a given jurisdiction 

at the same rate may appear unfair, since it penalizes those 

seller entities that scrupulously abate emissions but whose 

counterpart entities, in the same jurisdiction, fail to meet 

their obligations. But this unfairness is essentially a national 

problem, since it could only be the result of lax enforcement at 

the national level and can best be fixed via national action. 

Furthermore, emissions trading would be structured to continue 

for many years. Such an ongoing market creates an economic 

incentive for sellers to ensure quality. More specifically, if the 

rate at which states that are net sellers of permits discount 

future gains is sufficiently low and the magnitude of expected 

future permit sales is sufficiently high, states will seek reputations 

for selling valid permits. Sellers of fully valid permits 

would also have an incentive to cooperate with and even support 

credible monitoring systems, so that their permits would 

be regarded ex ante as valid and could command their full 

price. In short, buyer liability makes seller incentives largely 

economic rather than political. Seller incentives would not 

rest on concern about climate change; they would rest on an 

ongoing desire for profit. 

Reputation (for high value permits) is consequently at the 

center of this self-enforcement mechanism. It is therefore 

crucial to design the allocation system so that sellers of permits 

would face the prospect of a substantial stream of revenue 

many years into the future. If the “shadow of the future” is 

too short, incentives for compliance will tend to vanish. In the 

long run, of course, the caps will have to “bite” even on those 

countries that were net sellers of permits when they originally 

joined. Our expectation is that, over time, countries such as 

China would increasingly recognize their stake in mitigating 

climate change; that is, at the state level, incentives would 

become political as well as economic, even if private entities 

would continue to be primarily motivated by profit. Having 

been part of a cap-and-trade system, these governments would 

also have developed the institutions necessary for effective 

participation, and acceptance of meaningful caps would 

therefore create a less uncertain prospect for them. In other 

words, ideally, the period of being large net sellers of permits 

would be a transition phase, easing countries’ way into full 

membership. 

The problem of assessment 

To be effective, any cap and trade regime, whether involving 

buyer or seller liability, requires an accurate and prompt ex 

post assessment of permit quality. In view of our assumption 

that any system that can be gamed for strategic advantage 

will be gamed, any technically complex system of assessment 

should be examined closely from a political standpoint. As 

in liability systems, complex technical arrangements can be 

strategically manipulated in ways that are not transparent. If 

so, their very complexity may be self-defeating. 

The most serious problem of measurement is political: An 

international assessment process will be vulnerable to political 

pressure, and like judges on international courts, individuals 

responsible for conducting an assessment may feel strong pressures 

to support the positions of their national governments. 

As a result, strenuous efforts must be made to insulate the 

assessment process from political pressure. 

Conclusion 

Our proposed system for a post-Kyoto regime rests instead on 

a model of buyer liability coupled to annual ex post assessments 

and jurisdiction-equal discounting of invalid permits. 

This system is incentive-compatible for two reasons: buyers 

have incentives to monitor the system and price permits 

according to perceived validity, and sellers have incentives, 

if allocations are correct, to maintain their reputations for 

reliability. The system will not operate automatically: In particular, 

institutions will need to be created to assure that ex 

post assessment is reliable and, ex ante, that ratings agencies 

are also reliable. Indeed, one of the major conclusions of this 

paper is the urgent need for social scientists to think more 

carefully about assessment institutions that could be effective 

in a climate change regime with buyer liability. 

There are many potential problems with this system, which 

are discussed in the full paper. However, the cardinal virtue of 

a buyer liability system is that it would not require that an international 

organization ensure compliance with international 

commitments—a condition that, as we have seen, cannot be 

met. This system would instead be self-enforcing. 

Robert O. Keohane works 

as tutor at the Woodrow 

Wilson School of Public 

and International Affairs, 

Princeton University. 

Kal Raustiala works 

as tutor at the UCLA 

Law School & UCLA 

International Institute. 


50,000,00 

50 trillion dollars 

This is how much damage the financial and economic crisis has caused throughout the 

world so far. That is the estimate of the Asian Development Bank. 

The World 

Financial 

Crisis in 

Numbers 

10,000,000,000,000 


This is the total of the US government’s financial injection 

into the country’s crippled financial sector. 

In 2005, the average per capita income of a U.S. resident 

over 25 was 32,140 US dollars, according to the US 

Census Bureau. He or she would have to work around 300 

million years to earn this amount. This is the time from the 

Permian Age, when the first reptiles appeared, until today. 

4,000,000,000,000 


In its current report, the International Monetary Fund (IMF) 

places the losses to the world’s financial sector from bad 

securities at around four trillion dollars. 

This equals the private wealth of the richest 1025 people 

before the financial crisis, according to Forbes Magazine. 

428,000,000,000 

428 billion dollars 

Eastern European countries have to raise around 428 billion 

euros ($600 billion) to repay loans. That is 50 percent more 

than was first assumed, since the IMF’s “Global Financial 

Stability Report” had previously miscalculated it. 

Since 1970, the industrialized countries have promised 

to raise their development aid to 0.7 percent of gross 

domestic product. However, this percentage is unaffordable, 

say the G8 countries’ finance ministers in unison. But 

the costs would not even be half as high as the Eastern 

European deficit. 

22 


Agenda 

Financial Crisis 

0,000,000 

A human organism has exactly this number of cells. The body, by the way, replaces its 

cells every 14 days. The economic crisis will be with us longer. 

180,000,000,000 


The US insurance corporation AIG received federal aid 

several times in the last few months, which now totals 

around $180 billion. At the same time, AIG paid bonuses of 

165 million dollars. 

If you stacked 100 dollar bills on top of each other, they 

would build a tower around 180 kilometres high. That is 

around 20.5 times higher than Mount Everest, the world’s 

highest mountain. 

105,000,000,000 


This much is being contributed to the International Monetary 

Fund by the European Union alone, as was decided at the 

economic summit in London. 

Three-quarters of the harmful greenhouse gases in the 

atmosphere come from industrialized nations. Developing 

countries bear the brunt of the damage, however. The 

Oxfam NGO estimates that some 100 billion U.S. dollars 

are needed to protect poor countries from the effects of 

climate change. 

24,000,000,000 


China supports the dollar with around 24 billion dollars 

monthly (as of May 2009). Up to now, the Chinese central 

bank has bought a total of around 770 billion dollars worth 

of US treasury securities, reports the Neue Züricher Zeitung. 

What could this amount do? Worldwide, 800 million people 

suffer from hunger. This number could be cut in half with 

24 billion dollars per year. 

1,000,000,000 


One billion seems to be the smallest unit of measure in the 

current worldwide rescue plans. Amounts below that seem 

hardly worth mentioning in the media. 

Experts estimate that at least one billion people worldwide 

have to live on an income of one dollar per day. The billion 

that hardly plays a role any more in the worldwide financial 

merry-go-round would give these people a good day. Not 

much, perhaps, but more than many a “rescue package” is 

worth. 


24 


Agenda 


Corporate 

Responsibility in 

Times of Crisis 

2008 will be remembered as the year of crises. The breakdown of financial 

institutions and markets and the subsequent worldwide economic 

downturn have put the spotlight on issues that the United Nations Global 

Compact has long advocated as essential responsibilities for modern 

business and today’s global markets: comprehensive risk management, 

long-term performance, and ethics. 

By Georg Kell 

No doubt, poor regulation and oversight were among the 

key factors contributing to this dramatic chain of events. But 

equally important, the financial crisis revealed an inadequate 

understanding of risk and a fateful focus on short-term returns. 

In fact, if we were to take just one clue from the meltdown, it 

is that the global marketplace is in need of a stronger ethical 

orientation and a more comprehensive understanding, assessment, 

and management of risks that gives consideration to 

material issues in the environmental, social, and governance 

(ESG) realms. 

Restoring confidence and trust in markets requires a shift to 

long-term sustainable value creation, and corporate responsibility 

must be an instrument towards this end. If the crisis 

is any indication, it is now time to build on the advances 

made over the past 10 years by companies and investors in 

the area of ESG performance and bring this discipline to the 

mainstream. 

By understanding and broadly applying key lessons from the 

financial crisis, there is a genuine opportunity to alter the course 

of current challenges that will otherwise have systemic and 

game-changing consequences, notably climate change. Crises 

linked to food, water, and energy also pose serious threats. The 

call for governments, financial institutions, corporations, and 

citizens to responsibly manage these risks is urgent. 

For business, a few key lessons have emerged 

Long-term considerations and comprehensive risk-management 

must be integrated into market expectations and corporate 

strategy: Obsession with short-term profits and oftentimes 

reckless disregard for long-term considerations played an 

important role in destabilizing markets everywhere. At the 

same time, insufficient attention has been paid to ESG issues, 

which have gained in relevance and, thus, materiality to business 

– particularly climate change, water, and poverty. 

True business leadership must focus on stakeholders, not only 

shareholders: Well-publicized accusations of greed, fraud, and 

abuse – ultimately disregard for ethics and the interests of 

society – are numerous in the wake of the financial crisis. A 


Viewpoint: Do we need a 

new economic system? 

By Dr. Elmer Lnzen 

In 1933, representatives from 66 countries met in London to 

find a common solution to that era's global economic crisis. The 

idea: to have London send a signal for a new global financial 

system. The conference was a flop. On BBC Radio, economist 

John Maynard Keynes called it a complete yawn, and went on 

to say that conferences of this type usually ended in empty 

platitudes and ambiguous phras es. 

Seventy-six years later, the world is once again peering into 

the abyss of a global economic crisis, and they're meeting 

in London again to discuss the cornerstones of a new global 

financial system. Even if history never repeats itself, there are 

certainly parallels: The global economic crisis of the 1930s led 

once already to liberalism being criticized and to the expectation 

that state intervention would lead the way out of the 

crisis. This Keynesianism shaped the European social market 

economy and only came to a standstill in the wave of inflation 

that followed in its wake. Today, too, most politicians have 

decided on the collapse of neoclassical/neoliberal economic 

policy by acclamation. John Maynard Keynes is experiencing 

a magnificent comeback. 

So what kind of economists do we want? Sensitive psychologists? 

Analytical scientists, or observant historians? There are 

two common types in the West: the economist-as-doctor and the 

economist-as-prophet. The doctor is the type who has problemsolving 

prescriptions or drafts “surgical cuts” to bring about a 

cure. The aim of the pragmatic doctor is not to illuminate the 

economy, but rather to treat the symptoms. The doctor comes 

when the national economy is suffering. Any Keynes or Jeffrey 

Sachs would certainly be a well-known example here. 

When it comes to forecasting, however, we have all those 

economists that we could almost call astrologers: They can 

predict the future numbers on gross national product, exports 

or unemployment with seemingly exact precision. They work 

as augurs of the national economy in economic research 

institutes or as chief economists for the major banks. Since 

the economy has to be rational and therefore predictable, the 

need for their services never flags. But just as it is for most 

astrologers, however, the world is always full of surprises, 

and the forecasts are usually wrong. Economists speak of the 

phenomenon of "fat tails". 

Could the crisis lead us to remember the economists as philosophers 

again? After all, many of the founding fathers of 

the market economy were of this type: Smith, Ricardo, Hayek 

and others. They questioned the fundamentals: which rules 

should be valid for the economy, and how much of the state 

do we need? What is the meaning of market and competition? 

And how are we to understand what is fair? Such a regulatory 

debate appears in an era when the world is falling apart, both 

in real terms and in principle. 

The current crisis is also a crisis of economic theory. Indeed, 

we are learning to say goodbye to many of our fondest habits, 

including the fact that fundamental company disclosures 

alone are not sufficient. No one is “too big to fail” anymore. 

What are the cornerstones of a new theory, then? The future 

global economy will be a less American one. Nowhere can the 

erosion of power be deduced more clearly than in the financial 

world. For years, the United States has pontificated on how 

business should work; potential objections from European 

politicians in favor of a more social and consensus-based 

economy were waved away as "nonsense" from old Europe. 

What mattered were bankers’ bonuses, quarterly shareholder 

value and limitless creativity when inventing newer and more 

bizarre capital market products. None of that has any value 

today -- literal or figurative. This opens up opportunities for 

other points of view: globalization can be rediscovered as a 

global contest of ideas. It will be exciting to discuss globalization 

with people from China, Kenya, India and Peru, without 

establishing a hegemonic explanation beforehand; just think 

of a Mohammad Yunus model of social entrepreneurship. 

These are new paths, important ones. The Global Compact 

and initiatives like the Principles for Responsible Investment 

(PRI) and Principles for Responsible 

Management Education (PRME) can 

be important platforms for discussion 

in this regard. 

Dr. Elmer Lenzen 

Chairman 

26 


Agenda 


number of financial and corporate leaders have been blamed 

for focussing on delivering rewards to a relative few at the 

expense of the taxpayers now paying for bailouts. Companies 

operating in the new global context must respond not only to 

investors, but also consider interests of employees, communities, 

and other key stakeholders. 

For markets to function, we need effective disclosure standards, 

regulation, and oversight: Lack of transparency and disclosure 

allowed too many organizations to hide poor practices that 

eventually led to financial collapses and liquidity crises, as well 

as lost homes, jobs, and pensions. Insufficient or ineffective 

regulation and oversight in the financial markets were part 

of the problem. Additionally, outdated regulatory frameworks 

no longer effectively addressed sophisticated capital flows 

and financial products in today’s global market. Reform will 

undoubtedly require increased international cooperation and 

coordination. 

and increased poverty have become more widespread. Shortterm 

stimulus and recovery plans within companies must be 

mindful of ESG impacts. 

More companies need to engage more deeply on ESG issues 

and comprehensively disclose their efforts: 

• ESG in the boardroom: Boards and other corporate governance 

entities have the ultimate responsibility for the long-term 

Economies are more interdependent than ever before: The 

rapid succession from the collapse of the US mortgage bubble 

to a global financial crisis and a subsequent global economic 

downturn is proof of the high degree to which markets are 

interconnected and interdependent. All economies – developing 

to advanced – have been affected to varying degrees. 

And on top of massive investment losses and loan failures, 

many countries face imminent threats of increased poverty 

and social ills. 

A bright future for corporate responsibility? 

By all accounts, the crisis requires a renewed call for corporate 

responsibility – through the observance of universal principles 

in the areas of Human Rights, labour, environment, and anticorruption. 

Today’s confluence of global threats provides the 

most compelling and rational case for: embracing an expanded 

view of risk and opportunity management to include ESG 

factors; for increasing focus on long-term value creation in 

companies and markets; and for emphasizing responsibility 

and ethics to drive confidence and trust. 

The following framework for action should guide companies 

in their efforts to reconcile their commitment to corporate 

responsibility with the circumstances of a fundamentally 

altered global economy. 

Implementation and disclosure of ESG issues 

The economic downturn poses a real challenge for many 

companies, yet should not be used as an excuse to ignore or 

cut back on issues that directly impact the value of business. 

Climate change, Human Rights challenges, and corruption 

will not vanish as a result of economic decline and may actually 

worsen because of it. Already, downsizing, labour unrest, 


stewardship of the organization. In this regard, they are 

responsible for assessing and overseeing risks posed to the 

enterprise – financial and extra-financial. Recent studies 

indicate that a minority of boards are adequately addressing 

traditional risks, and even fewer are equipped to do so 

in the environmental and social realms. Companies should 

integrate ESG issues into boardroom deliberations and policymaking. 

• Subsidiaries and supply chains: Without a deeper penetration 

throughout companies and value chains, corporate responsibility 

efforts will have limited impact. While CEO ownership 

of ESG issues has grown, the momentum has not sufficiently 

moved down the organization and out to subsidiaries and 

supply chains. It is time to move for an integrated approach 

to implement all Global Compact principles throughout and 

beyond headquarters, and then report on these efforts. 

• Comprehensive and accurate disclosure: Without more comprehensive 

and accurate disclosure, it will be difficult to establish 

a strong link between ESG performance and long-term 

value. The Global Compact’s Communications on Progress 

(COP) framework was introduced for this purpose and has 

resulted in the submission of nearly 5000 reports by participating 

companies. Likewise, all of the Global Compact’s 

specialized engagement platforms – such as the CEO Water 

Mandate and Caring for Climate – have introduced disclosure 

requirements. Companies of all sizes are called on to 

use established frameworks and indicators when reporting, 

such as the Global Reporting Initiative. While much work 

remains to be done, limited early efforts by companies to 

include ESG figures in annual financial reports have been 

undertaken and mark an important shift in thinking on the 

financial materiality of these issues. 

• Engaging the investment community: One of the most important 

trends in recent years has been the movement by mainstream 

investors to identify and integrate ESG issues into relevant 

policies and investment decision-making. This provides a 

powerful impetus for companies to implement and disclose 

performance results. It is not just the growth of the responsible 

investment community that is promising – for instance 

the UN Principles for Responsible Investment now comprise 

470 signatories with around USD 18 trillion of assets under 

management – but also the campaigns being undertaken to 

encourage business action. Companies should capitalize on 

this growing opportunity to more actively communicate their 

ESG policies and performance with investors – emphasizing 

materiality and the links to corporate value drivers. 

Climate change 

The risks from climate change are intimately linked with issues 

at the core of the corporate responsibility movement: Human 

Rights, labour, and good governance. It is the most serious 

threat to global development and social progress. A global 

agreement on climate that results in a sufficient price for carbon 

will help ensure the continuation of a global marketplace 

based on openness and competition. On the other hand, the 

trade tensions and discriminatory carbon tariffs that would 

result from a failure to find an agreement could destroy the 

underpinnings of the global economy, upon which so many 

companies and investors are reliant. The ability of stakeholders 

– namely government and business – to cooperate and 

collaborate to find climate solutions will be the litmus test for 

the sustainability of our current global market system. 

• Building a green economy: Only a small fraction of business 

leaders are taking the climate agenda seriously. Many are 

still sitting on the fence, while others are actively lobbying 

against climate action. It is now time to change course and 

help build a green economy. Business must answer the call 

to create a future based on a low-carbon economy – green 

jobs, renewable energy, and energy efficiency – and make 

28 


Agenda 


use of their supply chains to ensure that the cleanest technologies 

are developed and applied everywhere. 

• Caring for Climate: All companies should join Caring for Climate, 

the world’s largest business-led initiative on climate change, 

in which chief executives commit to undertake comprehensive 

climate policies and disclose carbon emissions. In addition to 

assisting companies in the development of effective climate 

policies, Caring for Climate also provides a channel for the 

business community to contribute inputs and perspectives 

to key governmental deliberations. 

• Water stewardship: A critical – and related – issue for business 

action is water sustainability. Through the CEO Water 

Mandate, the Global Compact provides an avenue for advancing 

corporate water stewardship. The initiative assists companies 

in the development, implementation, and disclosure 

of water sustainability policies and practices. Examples of 

efforts include drip irrigation, water harvesting, and new 

technologies for recycling water from manufacturing. 

• Business vision for COP 15: It is essential for business to be part of 

the movement for a comprehensive and meaningful agreement 

at COP 15, the United Nations Climate Change Conference, 

to be held in Copenhagen in December 2009. In this context, 

business is called upon to develop a shared vision and a set 

of recommendations towards a new, global framework on 

climate change. Governments must understand that December 

is the time to seal the deal on climate change. 

Collective action 

The greatest global challenges will only be solved by cooperation. 

Effective partnerships can make it possible to overcome 

dilemmas that are too difficult or complex for one organization 

or sector to address alone. More and stronger collaboration 

between governments, civil society, and the private sector is 

needed. 

• The voice of business: The collective voice of business can lead 

to significant changes in expectations. Business initiatives 

have made important contributions to norms and standards 

– sometimes joining together on issues, such as corruption 

and nutrition, or by sector, such as extraction and textiles. 

For example, it will only be through effective advocacy and 

business statesmanship that business can help move the 

climate change agenda in the right direction. An enormous 

need for advocacy also exists in relation to water, food sustainability, 

and supply-chain standards. 

• Public-private partnerships: Almost all United Nations entities now 

work with business and civil society to address the Millennium 

Development Goals, as well as issues such as food security and 

disaster relief. Increasingly, government development agencies 

engage the private sector in coalitions and community-based 

initiatives. This momentum must be harnessed and a renewed 

focus placed on collaboration, with a move from pilot projects 

to large-scale transformative initiatives. 

Global frameworks and national regulation 

Today, there is an opportunity for chief executives to exercise 

business statesmanship by supporting solutions to issues, 

including climate change, anti-corruption, and other key 

areas. However, too often, a disconnect remains between a 

company’s responsibility commitments and its (direct and 

indirect) lobbying. 

There are several important opportunities linked to national 

regulation. Related to climate, business should support and 

not obstruct higher performance standards in critical areas 

such as energy efficiency and investments in new technologies, 

which will lead to low-carbon economies. Domestic 

stimulus packages implemented in response to the economic 

downturn must be carried out with sufficient transparency 

and oversight. Calls for regulators to require listed companies 

to disclose ESG performance should be supported. And 

efforts by governments to encourage business to implement 

ESG issues promise to bring increased attention and scale to 

corporate responsibility. 

Of course, in the midst of increased calls for regulatory safeguards 

and oversight, governments must do their part and 

actively encourage companies to voluntarily adopt tenets of 

corporate responsibility. 

Governments should further emphasize that regulation and 

voluntary initiatives are complementary. In addition to effective 

regulation, voluntary efforts can deliver value in terms 

of innovation and solution-finding that goes beyond the bar 

set by rules. There are additional steps to be taken to promote 

responsible business, most notably rewards for good corporate 

practices and tax incentives. 

None of the measures and steps outlined here will deliver results 

overnight. And some require fundamental transformations of 

business strategies and operations. But if anything good is to 

emerge from this economic crisis, it is the real opportunity 

to define a new phase in globalization, in which markets 

contribute to a world where all people live in societies that 

are prosperous and peaceful. 

Georg Kell is Executive Director, United 

Nations Global Compact 


Ethics and 

Business: 

Ensuring 

Credibility 

By ??? 

Ethics and business are often thought to be in tension and conflict with 

each other. How do you see the importance of ethics for the functioning 

of the social market economy? 

Andreas Suchanek: Ethics, in the form of a shared basic 

understanding of “right” values, such as dignity, freedom, 

justice, etc., are the foundation of the social market economy. 

Competition and legal foundations, both of which are essential 

for a market economy, lose their ability to function 

when people lose trust, and maintaining trust is always (also) 

a matter of the responsibility – or more generally: practiced 

values – of those active in the market economy. Tensions 

between ethics and business will always arise, but the goal is 

to find suitable investments that make ethics and business, 

responsibility and profit fruitful for each other. 

With the current financial and economic crisis, trust in the market 

economy’s advantages for society has reached an all-time low. How 

can business and society come together again? 

Suchanek: On the one hand, this is a problem of unfamiliarity: 

Many people understand too little about the market 

economy and what companies and managers achieve to have 

appropriate expectations; in other words, sometimes they have 

expectations that can’t possibly be met. Here, education and 

communication are needed about what we can reasonably 

expect and what costs are associated with a market economy 

(for the market economy is still the best of all economic systems 

today, despite recent events). 

On the other hand, it’s also a question of the commitment 

of decision-makers and companies active in the economy to 

clearly recognise their responsibility and communicate this 

credibly. In this context, “credible” means ensuring that you 

don’t make promises that you later can’t keep, whether these 

are concrete promises to customers, suppliers or employees or 

general promises in the form of communicated values. 

In many companies, a rediscovery of values has taken place in recent 

years. How can such a value system help companies responsibly flesh 

out the inadequate global order? 

Suchanek: Here, too: Properly understood, values are 

the foundation for a company’s ability to add value. Nobody 

wants to work for an irresponsible, unreliable company that 

lacks integrity, nor does anyone want to buy its products. 

That also holds especially for global competition. And so it’s 

no coincidence that a rediscovery of values is taking place at 

this time. Of course, it’s critical that these values be put into 

practice, and that requires investments in management training 

and development and in the governance structures. The 

values must be made consistent with the often challenging 

conditions of the company’s daily work. 

Implementation of values also demands mechanisms of guidance and 

control. These include, among other things, incentive systems, CSR 

management and compliance. Is this an important key for orienting 

innovation processes and company development on superordinate, 

non-financial goals? 

Suchanek: I believe, yes! The previously mentioned task 

of integrating the values into day-to-day work has a lot to do 

with the mentioned compliance and incentive systems. What’s 

important is to see both of them in context; in particular, 

employees must be made to understand why and how, for 

example, compliance measures serve to implement values 

such as integrity. 

CSR measures in the narrow sense of corporate citizenship, 

that is, contributions, pro-bono activities, giving employees 

time off for social or ecological projects, etc., can also be an 

important component if professionally implemented. But 

such measures should not be equated with a company’s 

responsibility; they’re only part of it. Corporate responsibility 

involves first and foremost the core business – the way 

profits are earned. 

Prof. Andreas Suchanek is the Dow Research 

Professor of Sustainability and Global 

Ethics at the Leipzig Graduate School of 

Management (HHL). 

The interview took place in conjunction with 

the 2009 Baden-Württemberg Sustainability 

Congress. 

30 


Agenda 



Has the 

Triple 

Bottom Line 

Failed, Mr. 

Elkington? 

“No” would be my one-word answer to the editors’ question. 

Indeed, the very fact that the editorial team of the International 

Global Compact Yearbook decided to commission this 

essay – some 15 years after the genesis of the “triple bottom 

line” agenda – itself speaks volumes. Success and failure are 

relative, of course, reflecting initial expectations and ambitions. 

In coining terms like “environmental excellence” (1984), “green 

consumer” (1986), or “triple bottom line” (1994), I was simply 

trying to help us all expand our minds for new possibilities. 

The second of these terms set a high bar, with our book The 

Green Consumer Guide selling something like one million 

copies worldwide, but even though Cannibals with Forks – 

the book in which I introduced the triple bottom line concept 

to a wider world – sold 95 percent fewer copies, I consider it 

to have had an equal, or even greater, impact. 

But what metrics or benchmarks of success should we use 

here? For me, one key consideration is this: Whatever business 

language we now use, the idea that corporations and 

financial institutions need to track and manage value creation 

(or destruction) in multiple dimensions is no longer as 

alien as it once was. In that sense, at least, the triple bottom 

line concept has helped open-out business, financial, and 

governmental horizons. 

Just for a moment, recall what the business agenda was like 

in this sector back in 1994. The leading edge of thinking 

focussed on what was called eco-efficiency – a term coined 

by the World Business Council for Sustainable Development 

two years prior. The idea here was that business should simultaneously 

pursue a reduction in the material- and energy 

intensity of goods or services, alongside greater durability, 

improved recyclability, and maximum use of renewable 

resources. All perfectly splendid and – as the recent energy 

crunch underscored – there is a great deal still to be done 

on those fronts. 

But my motivation in coming up with the triple bottom line 

reflected a very personal frustration that eco-efficiency – at the 

time often presented as shorthand for business sustainability 

– missed a trick (some would say deliberately so) by focussing 

on the interplay between financial and environmental factors. 

In the process, it created (or aggravated) potential blind spots 

in business thinking, ignoring at least two key components 

of business and market performance: the broader economic 

and social dimensions of value creation. 

At a time when a surprising number of otherwise sane American 

business leaders chose to see sustainable development as akin 

to socialism – even communism – this was a gamble: Perhaps 

we risked confirming their fears and forcing a general retreat. 

But I had already had a very positive response to a paper I 

had produced for the California Management Review in 1994, 

which spotlighted the potential for what I called “win-win-win” 

strategies and solutions. The triple bottom line language was 

an attempt to communicate this wider sustainability challenge 

to business people; the rather more populist version I 

came up with in 1995 – “People, Planet, Profit” – helped the 

32 


Agenda 


to some degree. Over time, these have evolved into a level of 

sophistication that would have been inconceivable a decade 

earlier. In parallel, socially responsible investment firms – and 

even mainstream financial institutions – began to open out 

their thinking and metrics, though the pace of development 

here has often been frustratingly slow. You might even argue 

that this new line of business thinking helped pave the way 

for later initiatives like the UN Global Compact. 

Academics and researchers have piled in behind, studying the 

different approaches. Triple bottom line case studies have been 

written and books published that critically evaluate progress 

to date. Among the latter, a key contribution was The Triple 

Bottom Line: Does it All Add Up? – Assessing the Sustainability 

of Business and CSR, published by Earthscan (London, 

UK) in 2004. As the publishers explained, it reviewed what 

the concept had “already achieved by stimulating change and 

bringing business to appreciate the importance and benefits of 

corporate social responsibility (CSR) and good environmental 

performance.” The contributors then explored what still needed 

to be done through regulation and legislation. 

concept go viral, particularly when Shell used it as the title of 

its first-ever sustainability report in 1997. 

Before long, various new institutions were adopting triple 

bottom line frameworks in their work, among them the Dow 

Jones Sustainability Indexes (where, to disclose an interest, I 

have been on the Advisory Board since the outset) and the 

Global Reporting Initiative (where I helped shift the original 

concept of environmental reporting to a triple bottom line focus 

– and now serve as a member of the Board). The concept also 

spurred the establishment of many other organizations, among 

them Robert Rubenstein’s TBLI Group, which organizes major 

conferences on related themes for the financial world. 

Over time, in addition to Shell, we have seen a growing array 

of companies building triple bottom line thinking into their 

values and strategies – with Denmark’s Novo Nordisk integrating 

it into its very chartering. In turn, the concept spurred the 

evolution and spread of related terms, including “double bottom 

line” (financial and social), “quadruple bottom line” (with the 

fourth dimension being anything from ethics to governance), 

the 3-D agenda of “environment, society, and governance” (ESG), 

and Jed Emerson’s concept of “blended value”. Whether in this 

last formulation or the World Resources Institute’s concept of 

the “next bottom line”, the quest was on for ways of accounting 

for and managing multi-dimensional value creation. 

Before long, literally thousands of companies were producing 

annual reports that embraced the triple bottom line approach, 

Overall, I am not unhappy with progress on the triple bottom 

line agenda, which I see gaining a new lease on life at the moment, 

particularly in some of the BRIC countries. But before I 

rest my case, I should underscore the fact that Cannibals with 

Forks was one of a trilogy, followed in 2001 by The Chrysalis 

Economy and in 2008 by The Power of Unreasonable People. 

The second volume went on to say that corporate responsibility 

was a necessary – but not sufficient – condition of 

sustainable development, with a major economic transformation 

likely during the second decade of the new century. The 

third volume explores the work of some of the potentially 

disruptive innovators and entrepreneurs who are evolving 

the new mindsets, technologies, and business models that 

will underpin any sustainability transition. This work was 

taken further in our 2009 report, The Phoenix Economy: 50 

Pioneers in Social Innovation. So I see the triple bottom line 

as a work in progress – not a museum exhibit – and as a 

continuing challenge to the thinking of decision-takers and 

policymakers. Watch this space. 

John Elkington is Co-Founder of 

SustainAbility HYPERLINKandHYPERLINK 

as an author he coined the term “triple 

bottom line” in 1994HYPERLINK. 


Visiting the Global 

Compact Office 

When I went to New York in March 2009, it was during the peak of the 

banking crisis and the self-doubts of the investment sector. There was 

a prevailing certainty that one economic era had come to an end, but 

ambiguity as to how the new era would look. Some of these elements are 

being intensively discussed and developed at the Global Compact Office: 

It is about lasting nature, transparency, responsible merchants, and the 

respectful handling of our planet. 

34 


Agenda 

Global Compact Inside 


By Dr. Elmer Lenzen 

The ejection from paradise finally took place at Sotheby’s. 

“The Peaceable Kingdom”, a naive depiction of conditions in 

paradise by Edward Hicks, was recently auctioned off there 

for just under 10 million dollars. The once superrich patron 

Ralph Esmerian had previously removed the painting from 

a New York museum. At present, this is not a unique event: 

Artwork on loan and promised gifts have been brought to the 

auction house a lot lately. 

The crisis has a firm hold on New York: Stocks have fallen to 

unexpected lows, fancy restaurants wait in vain for customers, 

and boutiques are unabashedly announcing discounts of up 

to 50 percent, even on noble shopping miles like Fifth and 

Madison Avenues. The government, meanwhile, is simulating 

“stress tests” for its sick banks, and the weather is also acting 

crazy: Though already the beginning of March, it’s colder than 

it has been in decades. Even the airports had to shut down 

temporarily. Good thing, some announcers said, that nobody’s 

flying anyway because of the crisis. 

In the UN district on the Hudson River, activity seems to be 

going on unabated. Delegations and visitors from around 

the world are pushing their way into the world-famous glass 

building to take part in a conference, one or the other of 

which is going on here almost all the time. Across the street 

is the Millennium Hotel, a popular accommodation for guests 

and speakers. Right next to it, almost inconspicuous, is the 

entrance area to one of the United Nations’ administration 

buildings. There on the sixth floor is DC2-612: the Global 

Compact Office. 

Here, up to 25 people work in a space of barely 200 square 

metres on the vision of a just globalization. The floor is shared 

with the “UN Mine Action Service”, which has also provided 

the pictures in the shared hallway. The photos of mine victims 

in Afghanistan shake viewers up and remind them of the challenges 

the world faces. The working conditions in DC2-612 

are cramped. Besides the work stations, the open-space office 

serves as a storeroom and a place to plan global strategy. “Still,” 

Global Compact spokesman Matthias Stausberg says with a 

grin, “each room has its own window and so has daylight.” 

That’s not always the case for US offices. 

This is where the world’s largest and most important initiative 

for business responsibility has its headquarters. Unspectacular. 

Modest. That fits an initiative that, though sponsored by no 

less than the UN Secretary-General, does not draw attention 

to itself by making loud demands, but rather discreet recommendations. 

Founded 10 years ago, the UN Global Compact is 

a strategic policy initiative for businesses that are committed 

36 


Agenda 


to aligning their operations and strategies with ten universally 

accepted principles in the areas of human rights, labour, environment 

and anti-corruption. Today, the Initiative includes 

well over 6,000 companies and other stakeholders from 130 

countries around the globe. 

The Global Compact sees itself as a dialogue forum that has 

promotion of its own ten principles on the agenda as well as 

support of broader UN initiatives, such as the Millennium 

Development Goals (MDGs). Critics counter that the Global 

Compact is a conglomeration of do-gooders. Toothless and 

weak. NGOs like Greenpeace or Oxfam consider every form 

of corporate social responsibility (CSR), and so also the Global 

Compact, to be pure window-dressing. For them, free trade 

only works with hard rules, not recommendations. But Global 

Compact director Georg Kell waves this aside: “No government 

bureaucracy can ever spread technology and innovation on 

the same scale and at the same speed as the private sector.” 

Former UN Secretary-General Kofi Annan understood this. In 

1997, he assigned Kell the task of sounding out the potential 

for cooperation between the UN and business. The man from 

Above: UNGC spokesperson Matthias Stausberg 

Left: The GCO offers many space for ideas but the 

working space is limited. 

southern Germany had previously gained experience with 

business cooperations as a development expert in Africa and 

Latin America. Two years later, he had to write a “really good 

speech” for Annan, Kell remembers during the interview. The 

UN Secretary-General wanted to hold the speech at the World 

Economic Forum in Davos as a direction-setting signal for the 

change of millennium. Kell was so nervous, he admits today, 

that he hardly heard a word. But the reactions were all the 

more clear: The vague vision of a Global Compact was so well 

received around the world that, within a decade, it would grow 

into the world’s leading umbrella brand for CSR. There’s a 

reason for its success: With the UN, the CSR issue has a credible 

sponsor. Companies, politicians, labour unions, scholars 

and civil-society groups feel equally represented and accepted 

here. The UN is one of the few supranational organizations 

whose credibility is widely recognized. 

The Global Compact lives from this credibility and from 

members’ desire to work with each other, not against each 

other. Olajobi Makinwa today is issue manager for the subject 

of anti-corruption. Previously, the lawyer was director of 

Amnesty International in South Africa. In the interview, she 

remembers that, for her, business used to be the enemy. In 

contrast, respect and acceptance of the other side characterises 

the Global Compact. Tolerance as a unique selling proposition. 

But there were doubts not only from the NGO side; even in the 

UN itself, many shared this fear, adds Melissa Powell, Head of 

Strategy and Partnerships. At first there was even a caricature 

showing the UN Building with company standards and their 

logos replacing the national flags. Subtitle: “UN for sale”. Today, 

Powell receives weekly calls from the Building asking for help. 

“Many believe”, Powell says, “that the Compact is sitting on 

mountains of company cash that we can distribute as we see 

fit.” That, of course, is not true, she adds. 

But for all participants, more important than the financing 

question is the upholding of credibility: Over the years, Kell and 

his team have quietly toughened the conditions of participation. 

The main instrument is the annually required Communication 

on Progress (COP). The COP must substantially report on the 

company’s engagement. Those companies that don’t submit 

it are first warned, then placed on the inactive list, and finally 

removed from the rolls. Even voluntary initiatives can have 

tough rules. In any case, the policy has consequences: Well 

over 600 companies have been delisted over the last few years. 

Is the Global Compact losing members then? On the contrary. 

The Initiative is constantly gaining in popularity, especially 

in the Southern Hemisphere. That is important, since it’s 

especially critical there to uphold labour, environmental and 

social standards. The ten principles must be implemented 

there in order to become a truly global standard. 

The new UN Secretary-General Ban Ki-moon also stands behind 

the pact. This support is important, and the Secretary-General 


makes it clear that the Initiative can 

show us ways out of the crisis. Ban: 

“Ensure that your boards, subsidiaries 

and supply chain partners use the Compact 

as both a management guide and a 

moral compass.” Morality as a compass 

in these times? That sounds pious. But 

Kell becomes feisty: Especially now, we 

see that responsibility and long-term 

strategies pay off in the end. 

That the worldwide crisis has come to 

a head in the finance and trade centre 

New York is understandable. And at the same time, it’s symbolic: 

New York, like almost no other city, incorporates globalization 

with all its achievements and excesses. The city is a melting 

pot of cultures, nationalities, lifestyles. New York is the city 

where every good, every service and every type of information 

is available at any time. But it’s also the city where one hour 

of parking costs as much as a pair of jeans sewn together in 

Bangladesh or Turkey. And where a simple dinner is as expensive 

as one year of school fees in Namibia. Everything in this 

city has its price, but only few ask about the value, Kell adds 

pensively. In this point, too, New York has followed its own 

path. The wrong path, Kell emphasises untiringly. 

Regardless, nowhere did the price and profit spiral turn as 

consistently as on Wall Street and in the Financial District. At 

the same time, nowhere were so few questions asked about the 

value of the products as right here at AIG, Lehman Brothers, 

Bear Stearns, Citibank and the others. Every news broadcast 

and every discussion in the city’s innumerable delis now seems 

to revolve around the cause of the crisis: The answer has five 

letters – greed. Greed destroyed understanding. Greed made 

people careless about risk. Greed made people irresponsible. 

That has become clearer to everyone today than in the past. 

Even to those who, until recently, joked about the term “business 

ethics”. 

Further down on the southern tip of Manhattan lies the heart 

of globalization and greed. From the Fulton Street subway station, 

it takes just a few minutes to walk to Wall Street: Here 

you can see the stockbrokers, the masters of the universe, as 

Tom Wolfe aptly called them in his novel. Men whose actions 

were guided solely by bonuses and commissions. Now the 

brokers inconspicuously pull on their jackets when they go 

out on the street. Not just because of the cold, as can be seen 

from their furtive glances to the left and right. Nobody wants 

to be recognised as a stock market speculator nowadays. The 

masters of the universe have grown meek. Many a finance 

and business magnate has taken on the role of enlightened 

sinner. The most spectacular was the confession of Jack Welch: 

The long-time CEO of General Electric and icon of US industry 

declared this spring that striving for short-term profits and 

Especially now, 

we see that 


and long-term 


in the end. 

higher share prices is a “dumb idea”. “On 

the face of it, shareholder value is the 

dumbest idea in the world,” Welch told 

the Financial Times. “Shareholder value 

is a result, not a strategy … Your main 

constituencies are your employees, your 

customers and your products.” 

Still, at Global Compact no one is happy 

about the crisis. Too obvious are the social 

and ecological costs that now have to 

be paid throughout the world: In China 

alone, 25 million migrant workers have 

been hit by mass layoffs so far. In Africa, the crisis is destroying 

the already meagre buds of economic growth. Australia, 

for its part, has largely put its climate protection promises 

on ice: Introduction of emissions trading has been postponed 

with the curt justification that the economic situation doesn’t 

permit it. And so the next step of the crisis is now starting: 

When companies get into trouble, the state currently jumps in. 

But who will stand by the state when it gets into trouble, as is 

happening in Iceland and many eastern European countries? 

38 


Agenda 


Left: New York is the centre of the financial world and 

since the beginning home of the Global Compact. 

Below: Major Bloomberg has promised a "greener" city. 

strategic orientation has clearly been jettisoned, and longterm 

thinking has given way to the struggle for short-term 

survival. On the other hand, of course, there are companies 

that understand how to adapt to the situation. The core 

question for Stausberg is, what is the appropriate stimulus 

to cause a change from short-term to long-term thinking? A 

corresponding insight in management circles, as is currently 

being called for, is certainly essential. But also just as important 

is a state that creates incentive systems, consumers that 

reward such companies through conscious consumption 

decisions and investors that look for more than supposedly 

dream yields. 

Not long ago, British Prime Minister Gordon Brown warned 

of “deglobalization”, an implosion of world trade with fatal 

results for social systems and political orders. 

Freedom without boundaries must fail, German Interior Minister 

Schaeuble warns. But freedom itself must not be put up 

for grabs in consequence. Rather, crash barriers need to be 

erected. And to continue with the thought process, there must 

also be guiding stars. Both, crash barriers and guiding stars, 

mark a new economic order, to which the Global Compact 

can give answers. Kell: “The quarterly short-term thinking that 

prevailed for so long is slowly giving way to a more comprehensive, 

sustainable risk assessment.” 

Olajobi Makinwa also sees opportunities for new moral guidelines: 

“It made people start asking questions,” she says with 

hope. Fundamental strategies are being tested. She herself is 

responsible for the issue of corruption and notes that many 

companies are now asking her for advice, since ethics are 

becoming more widely understood as providing a direction 

for the future. 

Only the spokesman Matthias Stausberg is not as optimistic 

as some of his colleagues. He currently sees two contradictory 

tendencies: On the one hand, there are a growing number 

of companies that, in panic and fully without reflection, are 

axing all budgets that aren’t essential for daily business. All 

The Green New Deal, which is being talked about so much 

these days, is an idea many people have to get used to. Still: 

“It’s time for a change” seems to be the phrase of the hour, 

thanks to President Obama. New York is perhaps an indicator 

for this change as well. The city wants to become greener. On 

the one hand, it wants to animate more and more people to 

switch to buses and subways, and on the other, it wants to 

make buildings, such as the currently highest skyscraper in 

the city – the Empire State Building – into model projects 

for energy efficiency. “With the renovation of the Empire State, 

we want to emphasise that 80 percent of the greenhouse gas 

emissions in New York are caused by buildings,” New York 

Mayor Michael Bloomberg says. The Empire State Building 

project can save 38 percent of the energy used. To achieve 

this goal, 6,500 conventional windowpanes on the building’s 

surface will be replaced by thermopane glass. In addition, the 

building’s heating and air conditioning and electrical systems 

will be made state of the art. Experts estimate the savings at 

4.4 million dollars per year, which will save 105,000 tons of 

CO2 in 15 years. Even now, the 78-year-old building glows 

green in the evening to show its good will. 

But let’s not get caught up in too much euphoria. The outcome 

of the painting auction at Sotheby’s should be a warning. The 

successful bidder has since fallen into financial trouble and 

is trying to back out of the purchase. A lawsuit has been filed 

between him and Sotheby’s. One thing, at least: Until the 

dispute is settled, the picture will remain in the museum. 

Dr. Elmer Lenzen, 

Chairman of the macondo Media Group 


Ethics is Back 

Georg Kell about the Crisis, 

Climate Change and the 

Role of the Global Compact 

40 


Agenda 


Since the very beginning, Georg Kell has been Executive Director of the Global 

Compact. Due to his ongoing fervour the Global Compact today is fully integrated into 

the UN system. We spoke with Georg Kell about the economic crisis, the search for 

new confidence, and the renaissance of politics and ethics. His message is clear: 

We have to reward sustainable business models. And we have to take climate change 

much more seriously, or the future might be rough. 

Interview conducted by Dr. Elmer Lenzen 

Mr. Kell, when the Global Compact was founded, the world was at the 

edge of the 21st Century. Since then, we have seen 9/11, questionable 

wars on terror and a financial and economic crisis of historic dimensions. 

Is the Global Compact prepared for such times? 

Ten years ago, the Compact was launched primarily to 

provide legitimacy. That was before Seattle and other World 

Trade Organization events. Without a doubt, these issues are 

still important today. But it has now become very clear that we 

have entered a new era: the world is struggling to restore trust 

and confidence in order to return to growth and employment. 

We are seeing enormous government interventions and experiencing 

market shockwaves unlike any since the 1930s. 

At the same time, we have to brace ourselves for the next 

systemic disruption: climate change. We completely agree 

with UN Secretary-General Ban Ki-moon’s position on sustainability 

in the 21st century. In his speech at this year’s World 

Economic Forum, he made it very clear that we need to take 

on both challenges at the same time: we need to restore trust 

and confidence, and we need to lay the foundation for more 

sustainable growth, which means greener growth. 

Cynics say the present crisis shows that economics and ethics have nothing 

in common. How do you respond? 

Ethics is back, values are back, and the search for long-term 

sustainability is more apparent than ever before! It may sound 

ironic, but the crisis has reinforced the search for values and 

ethics. The quarterly short-term thinking that prevailed for so 

long is slowly giving way to a more comprehensive, sustainable 

risk assessment. There is a fundamental lesson teaching 

us to focus on long-term value creation. Secondly, we have 

to come up with a more comprehensive risk paradigm, one 

which is adequate for interdependent growth and takes into 

consideration environmental, social and governance – ESG 

– issues. So, in a certain way, the crisis is playing into our 

hands. The growing need for the Global Compact may also be 

underscored by the fact that more than 200 companies have 

recently joined the Initiative, while others are rediscovering 

the value of engagement. 

But you cannot deny that we have experienced many dubious practices 

in the markets... 

The public has to distinguish among economic actors. 

Those entrepreneurs make investments, create employment 

and provide goods and services are as innocent of what has 

happened as most people are. Even in the financial sector, 

many parts were solid. What we see, if anything, is that the 

financial crisis started in the least regulated sub-categories of 

the financial system, among the so called “innovative product 

generators” of private equity funds and investment banks. Some 

of them are out of business now, and we welcome this. They 

stood for a lack of ethics, obsession with short-term profits 

and reckless behaviour. But it would be totally wrong to say 

that the whole private sector behaved unethically. 

And what role does the Global Compact play? 

What we presently see is a deficit of hope and stimuli 

for ideas and innovation. Through responsible behaviour, 

through deeper engagement in the Compact, you can make a 

contribution to restoring trust and confidence. Entrepreneurs 

can show that business is not just about surviving and cutting 

costs; they can also lead the way to a sustainable future 

by stressing innovation. All the government interventions 

right now will stimulate markets. But this is only an “incentive 

moment”. The true source of value creation is, of course, 

entrepreneurship. I’m convinced that, at the end of the day, 

we will come back to these economic fundamentals. 

In Davos this January, PM Gordon Brown warned against “deglobalization”. 

In his words, this does not mean a romantic return to the “good 

ol’ times”, but an abrupt destruction of global interdependence with 


tremendous economic and social costs. Isn’t this in contradiction to the 

optimism of the Global Compact? 

I share Gordon Brown’s view. I’m very concerned, too. 

If you ask me what the biggest threats are, I would respond 

populism at the country level; discrimination against everything 

that doesn’t come from the domestic market; and 

protectionism that rolls back all that we have established over 

the past decades. The multilateral global system has assured 

at least a minimum of fairness, and I have the hope that the 

politicians, in their wisdom, will not forget that humanity has 

had to learn several times and at great cost what it means to 

neglect an interdependent world. It would undermine our collective 

ability to create wealth, employment and hope. And it 

would also bring to an end the rapid diffusion of know-how, 

technology and solutions we urgently need in the fight against 

poverty and climate change. 

Due to the crisis, we’re seeing a tremendous comeback of Keynesian policy. 

Will this affect the balance of power in the Global Compact? 

Not yet, but I suspect it will very soon. I agree that the 

amount of government intervention we have seen over the 

past months is on a scale never before seen in the history of 

modern markets. I think there is both a risk and an opportunity 

in that. The risk is obviously that government interventions 

distort market performance and undermine competitiveness 

and lead to inward-orientation. That is the risk Gordon Brown 

mentioned at the World Economic Forum. A positive aspect 

could be, on the other hand, that governments recognize the 

opportunities that lie in collective responsibility and working 

together. They could use their interventions to accelerate the 

change processes we were talking about. They can set the right 

signals to reward responsibility and green growth. 

In fact, politicians from Obama to Merkel say that we need a sustainable 

economy. Why is this so hard to achieve in everyday life? 

Because we are lazy. We all dislike change, because it 

means making an effort. That is part of human nature. Over 

decades, we have got used to how prices are established, how 

institutions regulate and all the rest. We carry the whole legacy 

of the past with us, and now we realize that we need to change, 

for instance by putting different prices on certain products. 

How do you do that? It will be a painful adjustment process. 

Can you give us an example? 

No doubt, climate change and putting a clear price on 

greenhouse gas emissions will lead to major disruptions. 

There will be losers, because many companies are betting on 

the wrong horse. They didn’t adapt in time to be on the front 

edge of the change agenda. And, of course, these companies 

don’t like this kind of change and will try to preserve the 

status quo as long as possible. On winning side will be the 

many other companies that have already started to invest in 

a future where greenhouse gas emissions have market prices 

sufficiently high to encourage green investment. 

Do you really think that innovation alone can stop global warming? 

The complexity of climate change is incredible, and the 

more you look at it, the more it scares you. Indeed, we are 

very late in the game. Maybe we are already too far behind. 

According to UN estimates, over 75 percent of all disaster 

events from 1988 to 2007 were climate-related and accounted 

for 45 percent of deaths and 80 percent of the economic losses 

caused by natural hazards. I don’t want to be a doomsday 

prophet, but we better get prepared for a rough future with 

major discontinuities. And it is not only an environmental 

issue Climate change affects all aspects of life: It is a social 

issue. It is a political issue. It is a security issue. It is becoming 

an overarching challenge that humanity has to cope with. So 

what can we do? In principle, the solution is simple: We just 

have to tax what is bad and reward what is good. The easiest 

solution would be a heavy tax on carbon emissions. That would 

stimulate innovation. Will this become a global movement, or 

not? Will politicians have the courage and the will to make 

that happen? That is the key question. 

42 


Agenda 


“ 

Entrepreneurs can 

show that business is not 

just about surviving 

and cutting costs; 

they can also lead the 

way to a sustainable future 

by stressing innovation. 

Georg Kell, UN Global Compact Executive Director 

” 

Do you think collective political action will be a realistic option for the 

Copenhagen Climate Summit? 

I think so. We’re still baffled by how a regional housing 

crisis in the US could turn into a worldwide financial crisis 

leading to the biggest decline in the history of export-oriented 

economies, such as Korea or China, and to the possible breakdown 

of Ukraine and some other eastern European countries. 

So, the message to governments is that we all live in a very 

closely connected world. Even more so when it comes to 

climate change. Therefore, the world needs to move to a 

proactive risk management, and there’s a stronger need for 

cooperation than ever before. I was pleased to read about the 

European debates on how to deal with the crisis in the eastern 

part of the European Union. This may bring more coherence 

to Brussels' policy. Another example is China, which is now 

more proactive on the climate agenda. They understand the 

urgency to act, especially domestically, because their water 

and land are polluted, and the prospects of natural disasters 

are dramatic. 

Why is a successful Copenhagen Climate Summit so important? 

We need a successful COP 15 for many reasons. Imagine 

if COP15 were a failure and individual regions and countries 

would pursue their own way of putting a price on carbon 

emissions! That would lead to a patchwork of disjointed approaches, 

which ultimately would put enormous pressure on 

the trading and investment systems. No doubt it would lead 

to protectionism and cause major disruptions of economic 

growth. 

...and what role can the business sector play? 

I’m personally convinced that investment and commerce 

offer the best opportunities to spread technology and knowhow. 

Supply chains are the most effective way to diffuse clean 

technology. No government bureaucracy can ever spread 

technology on the same scale and at the same speed as the 

private sector. 

Thank you very much! 


Annual Review: 

Highlights and Gaps 

More companies joined the United Nations Global Compact 

(UNGC) last year than ever before. The UN’s voluntary initiative 

of companies recorded 1,473 new entrants in 2008, 

which is a plus of 30 percent over the previous year. But 

in carrying out the Network’s ten principles, there are still 

“serious implementation gaps”. That is what Georg Kell, 

Executive Director of the Global Compact Office, writes in 

his foreword to the Network’s 2008 Annual Review, which 

appeared at the beginning of April. Even more companies 

need to focus more strongly on the ecological and social 

aspects of their activities and on good company management, 

says Kell. There is room for improvement, especially 

in the supply chain, according to the report. In a survey 

of UNGC members, only seven percent of the companies 

said they require their suppliers to be members of the 

Global Compact. Among companies that have subsidiaries, 

the number was 30 percent. It is time, says Kell, “to move 

from pilot programmes in select corporate departments to 

an integrated approach to implement all UN Global Compact 

principles throughout and beyond headquarters, into 

subsidiaries and the supply chain.” In addition, company 

reporting on progress in implementing the UNGC principles 

often remains below potential, Kell believes. The reports still 

focus too much on policy, says the UNGC Executive Director. 

In contrast, detailed information on concrete improvements 

is seen less frequently. In 2008, the Network Office had to 

remove 404 companies from the member list (“delisting”) 

for not submitting an annual progress report. Despite these 

shortcomings, Kell says the 2008 annual report shows “that 

the Global Compact contributes positively to the global 

spread of responsible business practices.” The number of 

members has risen to 6,000, and the Network is now active 

in nearly 140 countries. 

Annual Review 

Sum velenim veniam, sum 

dolore ming enim dolorerit 

lam augueros diamcommy 

nonsed et lorero 

odolore conse dolobor 

erillup tations equatuerat 

lute magnit dolese magna 

facidui 

Global 

Compact 

Inside: 

News 

White Paper on Managing Climate 

Change and Water 

The UN Global Compact and the Pacific Institute jointly 

released a white paper which explores the linkages between 

climate change and water – from both the scientific and 

corporate management perspectives. Entitled "Climate 

Change and the Global Water Crisis: What Businesses Need 

to Know and Do", the paper covers a number of critical areas, 

including: How climate change is expected to impact water 

scarcity, water quality, and water demand; the ways in which 

water and energy are interconnected, including trade-off 

scenarios; the business risks of water and climate change; 

how businesses can strategically manage water-climate 

risks; the linkages between climate and water and the UN 

Millennium Development Goals. “This paper underscores 

the importance of viewing the many ways in which different 

environmental challenges are in fact deeply connected, and 

the need to approach these issues in an integrated way,” said 

Georg Kell, Executive Director of the UN Global Compact. 

“Climate change needs to be understood in terms of how it 

44 


Agenda 


Next Step in Anti-Corruption 

Investors Give New Twist to Good 

COP/Bad COP 

The 38 members of the UN-backed Principles for Responsible 

Investment (PRI) have written to the CEOs of 130 major 

listed companies which are signed up in the United Nations 

Global Compact. Twenty-five of the companies have been 

praised by the investors for producing notably high-quality 

COPs – including Air France and Starbucks – while over 

100 companies were identified as laggards by the investors 

for failing to submit a COP this year. Those companies that 

failed to produce COPs include GAP Inc, Severn Trent plc 

and LVMH. Representing one of the collaborating investment 

institutions, Aviva Investors’ Head of Research and 

Engagement, Steve Waygood, said: “The UN Global Compact 

system provides investors with a universe of ‘good COPs’ 

and ‘bad COPs’. Companies that produce a ‘good COP’ send 

a powerful message to a valuable audience of institutional 

investors. Those who have failed to submit a report will 

trigger alarm bells among investors who want real details 

about a company’s business practices on ESG issues”. 

The United Nations Global Compact has determined the 

next steps in the fight against corruption. At its fourth 

workshop at the end of February in New York, the members 

of the Working Group on Anti-Corruption agreed, among 

other things, to provide guidance to sensitize companies to 

the risks of bribery. The first part of the guideline, which 

recently appeared in the publication series RESIST (Resisting 

Extortions and Solicitations in International Transactions), 

focuses on the company procurement process. In seven 

scenarios, the guideline runs through classic situations that 

purchasers face in everyday business and shows how they 

can deal with corrupt offers. A second RESIST publication 

is planned for the end of the year. It will probably cover 

possible scenarios in project implementation. In addition, 

the members of the working group (representatives of the 

Global Compact Office, civil society, business, local networks 

and international organizations) introduced initial 

elements for more transparent company reporting on the 

issue of corruption. Since companies and organizations have 

previously provided differing amounts of information on 

this issue – for competitive reasons, among others – the 

matrix should include two sets of instructions for reporting, 

one more demanding, one less. Other topics of the February 

session were: Corruption in the supply chain and possible 

cooperation with governmental or intergovernmental organizations. 

In 2009, the members wish to work on anchoring 

the principles of the Global Compact – such as the fight 

against corruption – into the courses and curricula of 

business schools. 

Anti-corruption is one of the ten GC principles: Companies 

and organizations that join the UN initiative promise to 

work against all kinds of corruption, including extortion 

and bribery. According to estimates of the World Economic 

Forum, corruption causes economic losses of 2.6 trillion 

US dollars per year. That is more than five percent of gross 

world product. 


Annual Review: 

Highlights and Gaps 

More companies joined the United Nations Global Compact 

(UNGC) last year than ever before. The UN’s voluntary initiative 

of companies recorded 1,473 new entrants in 2008, 

which is a plus of 30 percent over the previous year. But 

in carrying out the Network’s ten principles, there are still 

“serious implementation gaps”. That is what Georg Kell, 

Executive Director of the Global Compact Office, writes in 

his foreword to the Network’s 2008 Annual Review, which 

appeared at the beginning of April. Even more companies 

need to focus more strongly on the ecological and social 

aspects of their activities and on good company management, 

says Kell. There is room for improvement, especially 

in the supply chain, according to the report. In a survey 

of UNGC members, only seven percent of the companies 

said they require their suppliers to be members of the 

Global Compact. Among companies that have subsidiaries, 

the number was 30 percent. It is time, says Kell, “to move 

from pilot programmes in select corporate departments to 

an integrated approach to implement all UN Global Compact 

principles throughout and beyond headquarters, into 

subsidiaries and the supply chain.” In addition, company 

reporting on progress in implementing the UNGC principles 

often remains below potential, Kell believes. The reports still 

focus too much on policy, says the UNGC Executive Director. 

In contrast, detailed information on concrete improvements 

is seen less frequently. In 2008, the Network Office had to 

remove 404 companies from the member list (“delisting”) 

for not submitting an annual progress report. Despite these 

shortcomings, Kell says the 2008 annual report shows “that 

the Global Compact contributes positively to the global 

spread of responsible business practices.” The number of 

members has risen to 6,000, and the Network is now active 

in nearly 140 countries. 

Annual Review 

Sum velenim veniam, sum 

dolore ming enim dolorerit 

lam augueros diamcommy 

nonsed et lorero 

odolore conse dolobor 

erillup tations equatuerat 

lute magnit dolese magna 

facidui 

News 

White Paper on Managing Climate 

Change and Water 

The UN Global Compact and the Pacific Institute jointly 

released a white paper which explores the linkages between 

climate change and water – from both the scientific and 

corporate management perspectives. Entitled "Climate 

Change and the Global Water Crisis: What Businesses Need 

to Know and Do", the paper covers a number of critical areas, 

including: How climate change is expected to impact water 

scarcity, water quality, and water demand; the ways in which 

water and energy are interconnected, including trade-off 

scenarios; the business risks of water and climate change; 

how businesses can strategically manage water-climate 

risks; the linkages between climate and water and the UN 

Millennium Development Goals. “This paper underscores 

the importance of viewing the many ways in which different 

environmental challenges are in fact deeply connected, and 

the need to approach these issues in an integrated way,” said 

Georg Kell, Executive Director of the UN Global Compact. 

“Climate change needs to be understood in terms of how it 

46 


Agenda 


Next Step in Anti-Corruption 

Investors Give New Twist to Good 

COP/Bad COP 

The 38 members of the UN-backed Principles for Responsible 

Investment (PRI) have written to the CEOs of 130 major 

listed companies which are signed up in the United Nations 

Global Compact. Twenty-five of the companies have been 

praised by the investors for producing notably high-quality 

COPs – including Air France and Starbucks – while over 

100 companies were identified as laggards by the investors 

for failing to submit a COP this year. Those companies that 

failed to produce COPs include GAP Inc, Severn Trent plc 

and LVMH. Representing one of the collaborating investment 

institutions, Aviva Investors’ Head of Research and 

Engagement, Steve Waygood, said: “The UN Global Compact 

system provides investors with a universe of ‘good COPs’ 

and ‘bad COPs’. Companies that produce a ‘good COP’ send 

a powerful message to a valuable audience of institutional 

investors. Those who have failed to submit a report will 

trigger alarm bells among investors who want real details 

about a company’s business practices on ESG issues”. 

The United Nations Global Compact has determined the 

next steps in the fight against corruption. At its fourth 

workshop at the end of February in New York, the members 

of the Working Group on Anti-Corruption agreed, among 

other things, to provide guidance to sensitize companies to 

the risks of bribery. The first part of the guideline, which 

recently appeared in the publication series RESIST (Resisting 

Extortions and Solicitations in International Transactions), 

focuses on the company procurement process. In seven 

scenarios, the guideline runs through classic situations that 

purchasers face in everyday business and shows how they 

can deal with corrupt offers. A second RESIST publication 

is planned for the end of the year. It will probably cover 

possible scenarios in project implementation. In addition, 

the members of the working group (representatives of the 

Global Compact Office, civil society, business, local networks 

and international organizations) introduced initial 

elements for more transparent company reporting on the 

issue of corruption. Since companies and organizations have 

previously provided differing amounts of information on 

this issue – for competitive reasons, among others – the 

matrix should include two sets of instructions for reporting, 

one more demanding, one less. Other topics of the February 

session were: Corruption in the supply chain and possible 

cooperation with governmental or intergovernmental organizations. 

In 2009, the members wish to work on anchoring 

the principles of the Global Compact – such as the fight 

against corruption – into the courses and curricula of 

business schools. 

Anti-corruption is one of the ten GC principles: Companies 

and organizations that join the UN initiative promise to 

work against all kinds of corruption, including extortion 

and bribery. According to estimates of the World Economic 

Forum, corruption causes economic losses of 2.6 trillion 

US dollars per year. That is more than five percent of gross 

world product. 


The Global 

Compact 

in the 

Emirates 

48 


Agenda 


In just 20 years, the countries of the Gulf Cooperation Council (GCC) have transformed 

themselves from deeply traditional nations that depended largely on oil revenues to 

booming metropolises with rapidly growing and diversified economies. The transformation – 

especially in the United Arab Emirates (UAE) has been staggering; once home to a small 

and tight knit society, the UAE today boasts over 202 different nationalities, making it one of 

the most diverse nations in the world. The rapid development of the region is 

accompanied by a greater call for a more responsible and sustainable way of doing 

business, in order to solidify the progress that is being made. 

By Habiba Al Marashi 

The UN Global Compact is gaining momentum 

all over the world and the Gulf 

Region is no exception to this trend. One 

of the world’s fastest-growing regions 

in terms of economy as well as demographically, 

the Gulf Region presents 

the UN Global Compact with a unique 

opportunity to make a firm and lasting 

impact on the way that business is conducted 

in this part of the world. As the 

UN Global Compact Local Network focal 

point for the GCC states, the Emirates 

Environmental Group has been actively 

engaging local and regional businesses, 

government, and semi-government organizations 

since 2007. 

The state of CSR in the 

GCC States 

The Gulf Cooperation Council is made 

up by Saudi Arabia, the United Arab 

Emirates, Qatar, Oman, Bahrain, and 

Kuwait. This oil-rich region has seen 

tremendous growth in the last 20 years, 

with the focus – especially in countries 

like the UAE – shifting from being almost 

exclusively reliant on oil-export 

revenues to becoming far more diversified 

economies. 

“We have to face facts; advanced 

industrialized countries 

must accept the majority of 

responsibility for cleaning up the 

environment. Some developed 

countries do not want to take 

responsibility under the pretext 

that it would undermine the 

progress of their country and 

affect the welfare of their society. 

This is both unfair and selfish.” 

Sheikh Mohammed bin Rashid al Maktoum, Vice 

President and Prime Minister of 

the UAE and Ruler of Dubai 

As a result of this diversification, the 

region has witnessed an enormous influx 

of foreign capital, companies, and 

labour. This has had a significant effect 

on the social and environmental makeup 

of the countries in the GCC and has 

posed serious questions with regard to a 

wide variety of issues, ranging from the 

national identity of the local populations 

to the growing environmental footprint 

of the GCC. 

Certain aspects of Corporate Social Responsibility 

(CSR) have a long history in 

this region (philanthropy is one of the 

five pillars of Islam), but until recently, 

CSR as a comprehensive, long-term business 

model was largely unknown in 

the GCC. Although national governments 

have been quick to recognize 

the environmental implications of the 

massive growth of their economies, and 

have taken innovative steps to reverse 

this trend (Masdar City, the world’s first 

Carbon Neutral city in the Emirate of 

Abu Dhabi is one particularly notable 

example), there are other areas where 

legislation is lagging behind the fastpaced 

developments on the ground. 

Emirates Environmental Group (EEG) has 

been playing a central role in convincing 

businesses and the general public 

that it is imperative that both local and 

international companies step up and – 

voluntarily – take up the responsibility 

of doing more than is minimally required 

of them. 

Increasingly, companies in the GCC are 

realizing that there is more to Corporate 

Social Responsibility than just PR value, 

and they are starting to incorporate CSR 

principles into the core values of their 

businesses. As is to be expected of dynamic 

and varied economies, the CSR 

initiatives being undertaken by GCC 

businesses vary greatly in scale, qual- 


ity, and sustainability. Nevertheless, the 

enthusiasm with which the UN Global 

Compact has been received by companies, 

government, and semi-government 

organizations in the GCC proves that 

there is great potential to achieve truly 

sustainable growth. 

The UN Global Compact Local 

Network in the GCC states 

Two years of diligent preparation, raising 

awareness of the UNGC in the GCC 

states, and developing a local framework 

culminated in the official launch of the 

UNGC Local Network for the GCC states 

on April 7, 2008. The festive occasion 

brought high-level representatives from 

government, semi-government and the 

private sector together for the official 

ceremony. The event even received the 

patronage of the Crown Prince and chairman 

of the Executive Council of Dubai, 

HRH Prince Hamdan bin Mohammed 

bin Rashid al Maktoum, underlining 

the support that the UNGC enjoys in the 

highest levels of government. 

The UNGC executive director, Mr. Georg 

Kell, provided the keynote speech, while 

other speakers included Mrs. Habiba 

al Marashi, and Steering Committee 

members Mr. Mohammed Al Sarhan and 

Mr. Rami Ghandour. In addition to the 

17 companies that had already signed 

up before the official launch, another 

organization joined the UNGC Local 

Network at this event. The high-level 

guests and impressive media turnout 

gave the launch excellent media coverage 

and subsequently helped further raise 

the profile of the UNGC Local Network 

with the general public. 

The UNGC Local Network structure 

The Emirates Environmental Group acts 

as the focal point for the UNGC Local 

Network. The EEG’s chairperson, Mrs. 

Habiba Al Marashi, sits on the UN Global 

Compact board. The diversity of the GCC 

is perfectly exemplified in the UNGC 

Local Network for the GCC Secretariat 

office, where people from 12 different 

countries work together to advance the 

principles of the UNGC in the GCC. 

Although the secretariat of the Local 

Network is based in Dubai, UAE, the 

Network aims to actively involve participants 

from all GCC states. Reflecting this 

aim, the steering committee for the Local 

Network consists of participants from 

the UAE, Qatar, and Saudi Arabia. The 

goal is to further expand this Steering 

Committee, so that its members truly 

reflect all countries of the GCC. Ideally, 

The Global Compact Network in Gulf 

Region was launched in April 2008. 

His Highness Sheikh Hamdan bin 

Mohammed bin Rashid Al Maktoum, 

Crown Prince of Dubai and Chairman 

of Dubai Executive Council, was the 

patron of the event. 

50 


Agenda 


each country will be represented by both 

a member of a government entity and a 

representative from the corporate world. 

The current members of the Steering 

Committee aim to convene at least three 

times a year, with the location of the 

meeting rotating between them. 

The UNGC Local Network’s activities 

The UNGC Local Network has been off to 

a flying start. Introducing the UNGC in 

the region that was largely unfamiliar 

with the Initiative and its principles, 

we initially set out to raise awareness 

among our existing members and the 

general public. Support has been steadily 

growing and we consequently rolled out 

a number of lectures, workshops, and 

documentation to further familiarize 

organizations in the region with the 

UNGC. 

We also provide our participants with 

access to CSR experts and resource speakers 

to further strengthen their own CSR 

practices. The Local Network has represented 

the UNGC at three international 

forums; the First Alliance of Civilizations 

Annual Forum (Madrid, January 15–16, 

2008), the Second Forum of Ministers for 

Social Development (Amman, November 

12–14, 2008), and the Business for the 

Environment Global Summit (Singapore 

April 22–23, 2008). 

In addition to officially representing 

the UNGC at high-level events, we have 

committed ourselves to lobby for greater 

UNGC participation whenever the (speaking) 

opportunity arises. Perfect examples 

of such opportunities were the International 

Business Forum (Doha, November 

28, 2008) and the CSR networking event 

hosted by the Dubai Chamber of Commerce, 

where the EEG chairperson, in 

the capacity as guest speaker, encouraged 

businesses to join the UNGC. 

In addition to public speaking engagements, 

the Local Network Steering Committee 

convened twice in the past year. 

The Local Network was also represented 

at the UNGC board meeting, with Mrs. 

Al Marashi present in New York (April 

30–May 1, 2008). 

UNGC Local Network participants 

The UNGC Local Network for the GCC 

states was launched under the patronage 

of Sheikh Hamdan bin Mohammed 

bin Rashid Al Maktoum, Dubai’s Crown 

Prince and the chairman of the Executive 

Council. His involvement with the UNGC 

Local Network and with its launch has 

been extremely beneficial to the Network 

in terms of credibility and publicity. In 

this region, having the government’s 

seal of approval is crucial to engaging 

key players in society, and the Crown 

Prince’s patronage has proven to be very 

helpful in this process. 

The UNGC Local Network currently has 

34 active participants spread out over 

five GCC states, while the applications 

for two more memberships are currently 

being processed. The participants are 

heterogeneous, with MNC’s, SME’s, and 

local companies all participating. Reflecting 

the GCC’s economy, the majority 

of participants are Construction and 

Engineering companies, with the Professional 

and Scientific and Oil&Gas 

enterprises coming in second and third 

place, respectively. 

As a relatively young Local Network, the 

UNGC Local Network for the GCC set out 

with a dual policy: to actively recruit new 

participants to the UNGC and to engage 

those businesses that had already signed 

up globally to become active participants 

locally. In this it has largely been successful. 

Businesses across the region are 

becoming more aware of the benefits of 

participating in a Local Network, and the 

Local Network focal point, in turn, has 

been stepping up its efforts to actively 

engage its Local Network participants. 

This too has paid off. UNGC global initiatives 

such as the CEO Water Mandate, the 

Caring for Climate statement, the CEO 

statement on the UN Convention against 

Corruption, and the CEO statement on 

Business and Human Rights were all 

endorsed by businesses from the GCC. In 

addition to these initiatives, one of the 

GCC Local Network participants became 

the first business from the Middle East 

to donate to the UN Central Emergency 

Response Fund (CERF) by answering the 

Secretary General’s call to donate to the 

Gaza Relief Fund. 

Among the participants of the UNGC 

Local Network for the GCC, there are 

varying motivations for joining the Network. 

In a participant survey held in 

2008, respondents cited the desire to 

build knowledge and capacity for CSR 

as their top reason for joining the UNGC. 

Improving stakeholder relationships and 

building trust came in as a close second. 

The fact that companies cite these objectives 

as being more important than just 

networking opportunities and PR value 

is a clear sign that the long-term value of 

responsible business is sinking in with 

companies in the region. 

The UNGC and CSR in the current 

financial climate 


The Emirates 

Environmental 

Group (EEG) 

The Emirates Environmental Group (EEG) has been active 

since 1991. Based in Dubai, UAE, the EEG was founded with 

an aim to create a more sustainable and equitable society in 

the UAE and the wider GCC region. As the name suggests, the 

EEG initially focussed mainly on environmental issues in the 

rapidly expanding UAE. In a country where civil society was 

virtually non-existent, the EEG quickly became the torchbearer 

for a wide variety of environmental initiatives. 

In partnership with its corporate members, several long-running 

and highly successful campaigns have been rolled out, including 

the Can Collection Drive (under the slogan YES WE CAN!, 

the EEG encourages schools, businesses, and individuals to 

collect and donate their empty aluminium cans at several can 

collection points). The glass, battery, toner, and paper collection 

campaigns have proven very successful and continue to 

attract more participants with each cycle. Furthermore, the 

EEG regularly teams up with businesses to organize Waste 

Management Outreach projects, which promote recycling 

with a wide variety of groups. 

Perhaps one of the most challenging, yet rewarding initiatives 

has been the “Clean up the UAE 2008” campaign, which featured 

more than 23,000 volunteers cleaning up 140.5 tonnes 

of litter all over the UAE. This massive campaign, which was 

coordinated by the EEG, featured mainly students as volunteers 

and offered them a revealing glimpse into what happens to 

our surroundings when we do not take care of it. 

In addition to educational campaigns, the EEG has a long-standing 

tradition of honouring the people and organizations that 

prove to be champions of change. Each year, the EEG honours 

those who have made exceptional contributions to environmental 

protection during a very high-profile gala dinner. 

The EEG has always maintained that protecting the environment 

cannot happen in isolation. Environmental responsibility 

is an integral part of a wider set of social and economic 

issues that the UAE and the rest of the GCC are faced with. 

Capitalizing on the solid relationship with government, semigovernment, 

and businesses in the GCC, the EEG CSR Network 

was launched on March 15, 2004. 

Taking the relationship between the EEG and its partners 

to another level, the EEG CSR Network offers participants a 

tool for facilitating open and transparent business policies 

and practices based on ethical values that have a sustained, 

positive impact on business, the environment, and society as 

a whole. The EEG CSR Network has proven to be an excellent 

platform for networking, sharing best practices, and learning 

among the corporate leaders in the GCC. Here, too, a host of 

activities have taken place, ranging from community lectures, 

workshops, training sessions, and the highlight of the year: 

The Arabia CSR Awards. Launched by the EEG CSR Network, 

the awards honour small, medium, and large businesses 

across the GCC and the wider Arab world that have made an 

exceptional contribution towards sustainable development 

through their CSR programs. 

Environmental sustainability, 

then and now 

After years of fast-paced growth of both the economy and the 

ecological footprint of the UAE, the government has wholeheartedly 

embraced environmental protection. 

Masdar City was mentioned earlier as a notable example 

in Abu Dhabi. Dubai’s Green Initiative ensures that all new 

buildings adhere to strict guidelines when it comes to sustainable 

materials and building methods. These groundbreaking 

initiatives build on the strength of the UAE as a relatively new 

country that has the opportunity, will, and capacity to lead 

when it comes to environmental sustainability. 

With leadership that has put its weight behind the quest for 

a more sustainable society, the challenge of fully engaging all 

sectors of society remains. The UAE and, to a lesser degree, the 

wider GCC states have become transient societies. The large 

foreign labour force that has descended on the region generally 

only call it home for a limited number of years, making 

them less attached to their environment and less inclined 

to care for it properly. The EEG has been combating this 

“But this isn’t my home anyway” attitude since its inception, 

and will continue to do so. Fortunately, we are witnessing a 

gradual shift in the level of awareness and commitment to 

work towards a more sustainable society. 

52 


Agenda 


The greatest challenge that we currently 

face is convincing businesses in the GCC 

region that the current financial crisis 

should not be an excuse to downsize 

their CSR efforts. An unfortunate side 

effect of the fact that CSR is relatively 

new in this region is that its position as 

an integral business component has not 

yet been completely solidified in many 

and managing human capital are now 

more pressing than ever, and communicating 

this to government, semi- government, 

and private organizations across 

the region is our top priority in these 

trying times. 

Conclusion 

The GCC has successfully transformed 

itself into a global financial hub, with 

the UAE standing out as a shining example 

of a modern, open, and progressive 

Arab nation. Several progressive leaders 

of the countries in the Gulf have been 

lavished with praise and admiration for 

their visionary approaches to the development 

of their countries. The people 

of the GCC are rightfully proud of the 

immense leaps that they have taken in 

such an incredibly short time. It is, however, 

too soon to sit back and rest on our 

laurels. With the privileges of development 

also come the responsibilities. As 

His Highness Sheikh Mohammed said: 

“It would be both unfair and selfish to sit 

back and let others deal with our shared 

responsibility towards the environment 

and the society that we all live in.” 

Winning companies honoured as 

pioneering champions of the first-ever 

Arabia CSR Awards in 2008. 

businesses. In the wave of company 

downsizing that has also affected the 

GCC, departments dealing with CSR issues 

have been among the hardest hit. 

The UNGC Local Network for the GCC 

is acutely aware of these developments 

and is actively reaching out to existing 

and potential participants to try and 

reverse this trend. 

The Network’s first workshop of 2009 

was focussed on doing “Sustainable Business 

in the Current Economic Climate”. 

Featuring prominent guest speakers from 

the public and the private sectors, the 

workshop underlined the importance 

of sound CSR practices in this economic 

climate. According to the Director of 

Sustainability for Deloitte, “Corporate 

responsibility and Sustainability are an 

imperative, because those companies 

that fail to address CSR will find themselves 

on the path to corporate extinction.” 

His strong message was echoed by 

the CSR manager of the Dubai Chamber 

of Commerce and Industry, who told the 

audience that “Environmental challenges 

like global warming will not go away. 

They will intensify, causing an array 

of social challenges too.” Both speakers 

proceeded to present the audience 

with an outline of practical steps that 

can be taken to ensure responsible and 

sustainable business practices in the 

current climate. 

As the UNGC Local Network for the GCC 

focal point, we consider it to be our 

responsibility to continue to spread the 

message of the importance of CSR, especially 

in this current climate. Issues such 

as transparency, responsible investment, 

At the EEG, we work towards yet another 

transformation of the GCC – from 

capital-driven development to a fully 

inclusive and sustainable society that 

honours its rich heritage while leading 

the way towards an equitable and 

responsible future for all who call this 

region home. 

Habiba Al Marashi is Chair of the Emirates 


Human Rights 

Environment 

Cap Gemini 

Carrefour 

Danfoss 


Grundfos 

Novo Nordisk 

Sanofi-Aventis 

Groupe SEB 

Toms 

Labour Standards 

Adecco Group 

Amazon Carribean 

Arcandor 

Ernst & Young 

Otto Group 

TMS Group 


Ampeg 

Autostrade 

Bayer 

BASF 

Coc-Cola Hellenic 

Deutsche Post DHL 

Dong Energy 

E.ON 

Holcim 


REN 

PT Smart TBK 

Anti-Corruption 

Siemens 

Partnership 

Financial Markets 

Medine 

Nexen 

Deutsche Bank 

54 


Agenda 

Best Practice 

Best Practice 

Solely responsible for the editorial contributions under the heading "Best Practice" 

are the companies and their authors themselves. 

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Adecco Group 

Ampeg 

Amazon Carribean Guayana 

Autostrade per L'Italia 

Arcandor 

Bayer 

BASF 

Cap Gemini 

Carrefour 


Danfoss 

Deutsche Bank 


Dong Energy 

E.ON 

Ernst & Young 


Grundfos 

Holcim 


Medine 

Nexen 

Novo Nordisk 

Otto Group 

REN 

Sanofi-Aventis 

Groupe SEB 

Siemens 

PT Smart TBK 

TMS Group 

Toms 



Adecco Group 

Carrying the Torch 

for GC Principles 

The availability, nature and conditions of work are central to the wellbeing of individuals, 

families, economies and societies the world-over. ‘Work’ is the core business of Adecco 

Group, the world’s leading provider of HR solutions, with over 31,000 people dedicated 

to enabling more than 500,000 colleagues to work every day with clients in over 60 

countries. 

By Stephan Howeg and Lilian Furrer 

It is a vital role between the individual 

and the employer which needs to be 

governed by a principled approach as 

Adecco Group recognized signing the 

UN Global Compact in 2003 as the first 

in its industry. 

The principle number 6 ‘The elimination 

of discrimination in respect of employment 

and occupation’ is where Adecco’s 

conduct makes the most obvious impact. 

As you may expect, all colleagues working 

for Adecco directly are trained in 

non-discriminatory practices. This is just 

the starting point of a range of pro-active 

initiatives that the company runs to create 

chances for individual development 

and the integration of disadvantaged 

groups into work and society. 

Amongst Adecco’s efforts is the International 

Olympic Committee (IOC) Athlete 

Career Programme (ACP). Launched in 

2005, the Programme is offered by the 

IOC and the National Olympic Committees 

in co-operation with Adecco who 

has been supporting athletes since 1999. 

Adecco uses its expertise to assist Olympic 

athletes make the transition from sport 

to the labour market, as well as advising 

companies on the benefits to hire athletes 

in conventional roles. Through the 

IOC Athlete Career Programme Adecco 

offers Career Training and Development 

support in the form of education, life 

skills and employment support. 

Before assuming that Olympic participants 

don’t need help in a career beyond 

competition, think again. For every star 

with major sponsorships hundreds of 

competitive athletes face a future they 

might not be prepared for. And in a 

number of cases, stars on the field of 

play benefit from the exposure of opportunities 

and education of respect and 

fair play in the workforce. 

Keeth Smart, USA fencing medalist in 

Bejing 2008, recognized he needed assistance 

to combine his work life and 

competitive sports. 

When joining the Programme in 2006 

he worked at a telecom company as 

financial research analyst where he was 

having difficulty balancing his work commitments, 

training schedule and commuting. 

So he looked to the IOC Athlete 

Career Programme for answers. 

With the Programme, he built his confidence 

and re-positioned himself effectively 

to combine his work life and 

competitive sports. "With my increased 

ability to describe my position and translatable 

skills, rather than joining a new 

Our principle 

We demonstrate respect for the 

rights and dignity of all people. 

We believe that work is a key 

factor for social integration and 

contributes to the well-being of 

society at large. Consequently we 

not only uphold the elimination 

of discrimination and specifically 

sensitize and train our staff on 

risks of potentially discriminatory 

labour practices, but also make 

use of our role as employer 

for the social integration of 

disadvantaged groups. 

2 


Best Practice 


Keeth Smart, Olympic Medalist 2008, 

not only had a clear focus in sport. 

Now he is studying for an MBA, being 

guided and coached by the IOC Athlete 

Career Programme to achieve his 

future career plans. 

Our “Disability and Skills” programme 

is up and running in France, Italy, Spain, 

Norway, Belgium, the Netherlands, Japan, 

the US and Argentina. In France, 

Adecco and an organization called Agefiph 

help15,000 people with disabilities 

find a suitable job each year. 

Regarding the mature workforce, Adecco 

USA has been an honoree since 2002 

of the American Association of Retired 

Persons (AARP) list of Best Employees for 

workers over 50, reflecting the success of 

initiatives such as Adecco’s Renaissance 

programme offering benefits for older 

people wanting to work. 

company, my employer worked with 

me, kept me on the team and enabled 

me to have a balanced scheduled that 

included working, training and competition." 

Now having retired from sport, 

Keeth is studying for an MBA with the 

ACP Programme manager still assisting 

with guidance and practical help on his 

future career plans. 

Over 3,000 athletes from more than 30 

countries in ages ranging from under 20 

to over 40 across five continents have taken 

part in the Programme. Whilst Keeth 

is an excellent example, perhaps the 

Programme’s benefit can be most keenly 

felt in the developing world, acting as a 

shining light for positive change and the 

relevant Global Compact principles. 

An example of this is the three-day 

programme that took place in Dakar, 

Senegal, run in conjunction with the 

IOC and the IOC Olympic Solidarity organization. 

The event is helping athletes 

from the African region prepare for the 

transition to the labour market amongst 

them Ibrahim Maiga, who represented 

Mali in the 400 metre hurdles. Ibrahim 

commented: “The coaching has an immediate 

effect and changes a person right 

away. It is training for the whole of life, 

something we live everyday, everywhere 

and with everybody.” 

Even though the IOC Athlete Career 

Programme aims to meet individual 

athlete’s needs for a fair chance in labour 

market, each participant becomes an 

ambassador ‘carrying the torch’ for the 

Global Compact principle of eliminating 

discrimination in respect of employment 

and occupation. 

The IOC Athlete Career Programme is just 

one of Adecco’s pro-active programmes 

focused upon striving for fair access to 

the labour market and equal opportunities 

for all. Other activities are focused 

towards the ageing population and mature 

workforce, the disabled, unemployed 

youth and the long-term unemployed. 

In Germany, Adecco supports a publicprivate 

initiative called Quadriga that 

since 2007 has had a 70% success rate 

in integrating young unemployed people 

into the labour market. Similarly 

in Argentina, Adecco is one of several 

companies supporting an International 

Labour Organization project aiming to 

coach, train and find employment for 

1,000 young men and women. France 

is home to Adecco’s largest project to 

support the re-integration of long-term 

unemployed. The ‘Interim et insertion’ 

programme currently coaches 4,000 

people each year to enhance their job 

searching skills. 

Supporting the integration of disadvantaged 

groups is one aspect of Adecco’s 

three-part Corporate Responsibility (CR) 

strategy. The additional focal points of 

skill development and safety at work 

for colleagues strengthen Adecco’s commitment 

to Global Compact principle 1 

‘Businesses should support and respect 

protection of internationally proclaimed 

human rights; and principle 2 ‘Make sure 

that they are not complicit in human 

rights abuses’. The importance Adecco 

places on CR as part of its sustainable 

business model is reflected by the creation 

of a dedicated CR organisation in 

2008 led by Group Communications 

and overseen by the Group CEO and the 

Corporate Governance Committee of the 

Adecco Group’s Board of Directors. 


Ampeg 

Keep persevering 

and act local 

Bad news from the world of climate research arrives on our 

doorsteps nearly every day, and not one day goes by without 

our using a back door to redress our personal balance of 

thought on the world in which our children will live one 

day: Perhaps it is just a temporary glitch in the climate – 

something natural, that will right itself in the end. Even 

Hans Joachim Schellnhuber from the Potsdam Institute for 

Climate Impact Research consoles himself with the hope that 

the scientific community may have made a collective error 

on this issue. He expressed his thoughts on the percentage 

probability of his hopes becoming true in the following 

statement on 26th March 2009. "Well, the chance that the 

whole scientific world has actually made a mistake here 

probably lies below one percent." 

By Peter Graf 

It was certainly naive to assume that the 

Kyoto Protocol would sort everything 

out, and it was definitely wrong to continue 

chanting the mantra of "everything 

will be alright in the end" for 10 years. 

Worldwide, CO 2 

emissions are increasing 

much more than feared in the most 

pessimistic of forecasts. Similarly naive 

is our ignorance of the long-term consequences 

of actions that have pushed us 

into the largest economic and financial 

crisis ever. The subsidises being pumped 

into the system to stave off this crisis are 

far higher than would have been needed 

to introduce comprehensive, short-term 

and effective climate-protection measures. 

Both situations clearly demonstrate 

that, in the short-term, it is wrong to 

rely on global regulation, which is still 

far-too-weak and that local action is 

needed. 

Taking our own company as an example, 

this white paper is designed to reveal the 

potential for savings that exists when 

an all-round investigation of energy 

consumption is performed outside of 

normal business operations. 

Immediate measures 

A tour around our company with a simple 

measuring device delivered the most 

surprising example of energy-savings 

potential: printers that consume just 1 

watt less in energy-saving mode than in 

normal mode! In energy-saving mode, 

only the display switches off on these 

network printers, and instead of consuming 

34 watts of electricity, they consume 

4 


Best Practice 

Environment 

Development in electricity consumption at AMPEG 

100% 

90% 

80% 

70% 

60% 

01.2007 04.2007 07.2007 10.2007 01.2008 04.2008 07.2008 10.2008 

33, and they do that 24 hours a day, 365 

days a year. This represents an enormous 

waste of energy, especially since our offices 

close at 6:00 p.m. and open up again 

at 8:00 a.m. This means that our printers 

consume electricity more than 14 hours 

a day for absolutely no reason. A simple, 

but effective measure to control this is 

to connect the printers in the printer 

room to a multiple socket outlet strip, 

and then connect this to the main socket 

outlet through a time switch. This can 

save up to 144 kWh a year, depending 

on the printer you use. 

We also identified 5-litre mini-boilers 

under the washbasins in our offices as 

another unnecessary energy guzzler: 

Four of them consume almost 1,500 

kWh a year. This is the same amount suggested 

by the Internet consumer portal 

Verivox as the yearly requirement for an 

average single-person household. A survey 

amongst our staff showed that they 

would be happy to go without hot water 

in the toilets to help the environment. 

Our immediate solution was to switch 

off the boilers. Since then, no one has 

complained about not having hot water 

to wash their hands with. 

We also found an easy-to-implement 

solution for our workplace PCs: Central 

entries in the Group Policy for the Active 

Directory now ensure that hard disks and 

screens on workplace computers shut 

down during breaks after ten and fifteen 

minutes, respectively. The computers go 

into sleep mode after 20 minutes, and 

as a consequence they only consume 

3.5 watts instead of 88. If employees 

are at a meeting, there is no need for 

their computers to be in standard mode. 

Although they may need 30 seconds to 

reboot them out of sleep mode, there are 

lots of things they can do to use the time 

effectively without their computers. 

Energy guzzlers 

AMPEG maintains a complex productive 

network to achieve the best-possible quality 

in the productive evaluation of software 

applications and the development 

of proprietary software. At the beginning 

of 2007, we decided to virtualise as much 

of our hardware as possible in order to 

reduce the electricity consumed by running 

a server on a 24/365 basis. Average 

power consumption amounted to 178 

watts an hour for hardware equipped 

with a single processor. This provided an 

energy-savings potential of around 1,560 

kWh per server per annum, which, again, 

is as much as a single-person household 

consumes a year. 

Employing virtualisation software, we 

managed to convert our physical computers 

into "virtual machines". We only 

needed three or four hours to perform 

a conversion. We also invested in cutting-edge 

blade systems equipped with 

energy-saving low-voltage processors to 

get as many virtual machines as possible 

to run on a single hardware host. 

The energy balance 

The chart demonstrates how massively 

downsizing our server hardware made 

it possible for us to significantly reduce 

electricity consumption from the 2nd 

Quarter of 2008. 

Our comprehensive package of measures 

allowed us to reduce electricity 

consumption throughout the company 

by 30 percent in two years and hence 

reduce our carbon footprint by several 

tonnes. 

AMPEG has reinvested a large part of 

what it has saved in electricity costs back 

into the environment, and although the 

higher unit price eats up part of the 

savings, we still wanted to set a good 

example and now get the electricity for 

our whole company from a supplier 

providing energy from 100% regenerative 

sources. 

Proactive measures 

The British historian Eric Hobsbawm 

recently argued that both socialism and 

capitalism are exhausted. A phase of 

reorientation like this represents exactly 

the right time for companies to act more 

justly in terms of social responsibility 

and positively showcase their climate 

protection costs as having social value. 

In return, shareholders should honour 

this investment in the future, even if 

they receive lower dividends in the shortterm. 

Our employees, who reap large 

benefits from the profits our company 

makes, have already been doing this for 

a long time. 

If we, the companies from the rich and 

developed European nations, set a good 

example, it will be easier for countries 

like the USA, Australia, Canada and 

others to implement climate protection 

goals. AMPEG's latest project is called, 

“30% less paper”. And we certainly aim 

to achieve this in 2009. 


Amazon Caribbean Guyana 

Indigenously Produced 

Organic Fruit 

By Gerd Pfitzenmaier 

“Without the cooperation with the indigenous people,” Xavier Richard knows, “our company 

would never have been able to thrive as it has.” Since its establishment in 1987, Amazon 

Caribbean Ltd. (Amcar) has relied on the efforts of thousands of indigenous people from the 

Arawack, Warrau and Carib tribes in Guyana. In the jungle of the Barima-Waini Basin, they 

collect the raw materials for Amcar’s products: hearts of palm and pineapple. “Our mission,” 

the company states accordingly, “is to generate, in partnership with the people in Guyana, 

economic value added from naturally growing products.” 

In his factory hidden in the jungle, the 

French adventurer Pierre Saint-Arroman 

has taught indigenous workers how to 

harvest certified organic hearts of palm 

and pineapples, pack them in cans and 

ship them to customers in Europe’s organic 

stores and U.S. malls. With these 

goods, Amcar and the indigenous people 

create “benefits for everyone involved”, 

Richard notes in summarizing the basic 

business idea. Economic success is, of 

course, important to him and Pierre 

Saint-Arroman – but at the same time, 

they want to help the inhabitants of the 

Orionoco Delta. “In the first 15 years of 

our work, Guyana went through economic 

crises,” Xavier Richard remembers. 

“Today, the people earn a secure income 

from Amcar.” 

The success story began as an adventure 

story: When Pierre Saint-Arroman 

travelled to the South American country 

in 1983, he actually wanted to dig 

for uranium. Guyana lives from the 

exploitation of its bauxite, diamond and 

gold mines, and with the experience 

he had gathered in the African bush, 

Saint-Arroman wanted to sell the ore 

in Europe as raw material for energy 

production. But the deal fell apart. Saint- 

Arroman stayed because he sensed the 

fresh political wind blowing in Guyana 

back then. The country was looking for 

foreign investors. He met Xavier Richard, 

and the two of them “copied the knowhow 

for processing hearts of palm from 

the neighbours in Venezuela and, with 

Dennis Wilson, Dennis Ramascindo and 

George Uthandi, built our own factory 

in Drum Hill,” Richard reminisces. The 

new entrepreneurs obtained the material 

for the mill from the rain forest on the 

Barima River. They also relied on the 

knowledge of their hired indigenous 

helpers: a first win-win business, from 

which the families living there have also 

profited from the very beginning. 

The company trained 500 indigenous 

people as organic farmers in an effort 

supported by the United Nations Development 

Programme (UNDP) and this 

South American country’s government. 

“Not only did Amcar secure its supply of 

organic raw materials,” the report states, 

“at the same time it secured the indigenous 

people a sustainable income.” Even today, 

the only connection to the cities on 

the ocean coast remains the boat trip 

through the jungle along the river and 

delta, which often takes up to two days. 

On the barges, Amcar employees transport 

food, clothing and fuel to the factory 

and carry their products to the harbour 

at Georgetown on the north coast. 

“Even in the first year, our employees’ 

families harvested 13 twenty-foot containers 

of hearts of palm,” says Xavier 

Richard, looking back at the company’s 

start, “which we could ship as exports to 

Europe.” With this, the company showed 

how much potential there is in Guyana’s 

little-used agriculture. The secret lies in 

the broad, pristine tracts of land, which 

are mostly overgrown by jungle. They 

are fully untouched by agrochemicals 

6 


Best Practice 


For Amcar, the basis of this business 

remains the hearts of palm. Their harvesting, 

the company emphasizes, is 

absolutely harmless for the natural environment 

in the jungle of Guyana, for 

the Euterpe oleracea are not cultivated 

in plantations, but grow wild in the 

forest. “People intervene only when 

harvesting,” Amcar says, describing this 

nature-friendly activity. To make sure 

that it stays this way, the company trains 

Guyana’s indigenous farmers to take 

lasting care of the jungle land. “This 

keeps the Amerindians from using nonecological 

production methods,” judged 

the United Nations Development Programme 

(UNDP) and the UWI Institute 

of Business in their 2005 volume The 

Millennium Goals and the Private Sector, 

The Caribbean Experience. 

and so could be used for organic farming 

within a short time, avoiding long 

transition times. 

Until Amcar was established, nobody had 

thought of selling the fruit or vegetables 

harvested in Guyana as organic food. 

But Richard and Saint-Arroman added 

another argument: They vaunt their 

cooperation with the indigenous people 

to the affluent consumers in far-away 

Europe and Arabia by offering hearts of 

palm and pineapple not just as “organic”, 

but also as “indigenous” fruit. And so 

they gain a second bonus from their collaboration 

with the indigenous peoples 

of South America. “Amcar proves,” they 

announce on their Internet site, “how 

we can benefit from the added value in 

the market.” And their products, ecologically 

produced by indigenous people, 

enjoy disproportional success with the 

customers.“ Annual growth in 2000 was 

almost nine percent and quickly jumped 

to 20 percent in 2005,” Amcar notes 

with satisfaction: “Investment in the 

professional processing of these nontraditional 

agricultural products can 

thus become an engine of growth.” And 

so in the company founders’ vision, the 

indigenous people would gain a key role 

in the global market: Their land and 

knowledge provide future generations 

with natural food and medicine. 

Consistent with this, CEO Pierre Saint- 

Arroman signed the Global Compact 

membership declaration for Amcar back 

in 2000. And consistent in its pursuit of 

these commitments, Amcar organises the 

food supply of the indigenous communities 

at affordable prices. The company 

also supplies transportation for the remote 

region: Their boats are usually the 

only connection to the world outside the 

jungle, and certainly the fastest. 

Together with the Red Cross in Guyana, 

the company offers health courses for 

employees’ families as well as for other 

members of the indigenous village communities. 

These are meant to fight malaria 

and inform people how to better 

protect themselves against infection with 

AIDS. The company’s commitment also 

includes education for the employees’ 

children and further development of 

workers’ technical skills. 

In all this work, the two entrepreneurs 

always keep the people with whom they 

work in view. And their commitment has 

not gone without recognition: In 2004 the 

Amcar founders were commended in “The 

World Business Awards in support of the 

Millennium Development Goals”. 


Autostrade Per l'Italia 

Upgrading 

Infrastructural Capacity 

and Reducing Atmospheric 

Pollution 

By Simonetta Giordani, Benedetta Masignani and Andrea Ragni 

Given the interest in the issue of air quality – an issue 

that necessarily implies a scientific approach – Autostrade 

per l’Italia embarked on an in-depth examination of the 

problem in all of its aspects in 2007. This was done with 

an awareness that the motorway network is not a source 

of pollution, but rather an infrastructure that facilitates 

the transit of vehicles, whose emissions vary depending on 

their basic technical features, their speed, and traffic flow 

in general. A correct approach to the issue of air pollution 

therefore leads to the conclusion that since motorways 

free the ordinary road system of traffic, they can serve to 

reduce pollution. 

Autostrade per l'Italia – 100 percent 

owned by Atlantia S.p.A., which is responsible 

for investments and strategies 

in the transport and communications 

infrastructure and networks sector – is 

the leading European concessionaire 

for toll motorway management and for 

related transport services. 

In Italy, about four million motorists – 

around 8 percent of the Italian population 

– use the Group's motorways daily. 

Those motorways cover 3413.5 km and 

contribute to the social and economic 

standing of Italy within Europe, ensuring 

an effective transport system and 

indispensable services in and between 

urban areas. 

In 2007 and 2008 Autostrade per l’Italia, 

in partnership with Euromobility Service 

S.r.l., the National Association of Mobility 

Managers, Rome, conducted an experiment 

aimed at determining the real advantage 

– in terms of the abatement of 

atmospheric pollution – obtained from 

the construction of an additional traffic 

lane in sections characterised by persistently 

congested traffic. The decrees that 

were issued between 2006 and 2007 on 

environmental impact evaluation (EIS) 

procedures for measures to upgrade the 

motorway concessionaire network are 

proof of the enormous importance that 

the Italian Ministry of the Environment 

attaches to the problems of atmospheric 

pollution. Every EIS decree offers the 

same recommendations: on the one hand, 

to implement environmental monitoring 

plans – by the proponents of civil engineering 

works – in order to acquire the 

data necessary to quantify and manage 

atmospheric pollution phenomena; on 

the other hand, to urge the regions to 

make their plans for rehabilitating the 

quality of the air – pursuant to European 

directives 96/62/CE and 99/30/CE – 

fully operational, thereby avoiding action 

against Italy for breach of EC regulations 

by the European Community. 

These provisions, which are contained 

in the EIS decrees on measures to upgrade 

motorway sections referring to 

various Italian regions (Lombardy, Emilia 

Romagna, Tuscany, Marche, Lazio), convinced 

Autostrade per l’Italia to conduct 

the experiment in Tuscany and 

Lombardy. 

The method used in this study marks 

a change to traditional methods based 

on the COPERT/CORINAIR methodology, 

since it does not use driving cycles 

8 


Best Practice 

Environment 

Design/Non-Design Comparison 

Percentage variation (%) 

0 

-5 

-10 

-15 

-20 

CO 

VOC NOx PM10 

vehicles. As concerns NOx and PM10 

emissions, the same reasoning applies 

with respect to heavy vehicles. Therefore, 

it can be concluded that the building of 

a third lane for the section in question 

will produce a reduction in polluting 

emissions by vehicle traffic. 

-25 

-30 

and average speeds, but instead is based 

on traffic microsimulation models and 

instantaneous emission factors (taken 

from the MODEMINRETS and DVB- 

University of Graz databases) that are 

applied to monitored driving cycles on 

the motorway sections. As a result, this 

method can represent local situations 

more effectively and supply more reliable 

estimates about the differences – in 

terms of emissions produced – between 

smooth-flowing traffic and congested 

traffic conditions. 

In 2007 the method proposed was applied 

to the Barberino del Mugello–Incisa 

Valdarno section of the A1 Milan–Naples 

motorway, and, in particular, to the subsection 

Barberino del Mugello–North 

Florence section, in order to analyse the 

effect of the enlargement of the road 

infrastructure on traffic emissions. 

The present motorway layout (two lanes 

per carriageway) was compared with 

the new design layout (three lanes per 

carriageway). The fluidity of the traffic 

produced by the enlargement design 

increased the average travelling speed 

and thus was responsible for "flatter" 

driving cycles. More specifically, flatter 

cycles mean less stop-and-go, during 

which emissions are highest. 

It was therefore demonstrated that in 

each of the five time intervals in which 

the day was divided, emissions of the 

main pollutants (CO, NOx, COV, and primary 

PM10) were significantly lower with 

the enlargement design. This conclusion 

is valid not only with reference to 2007 

but also 2010 – taking into account 

expected traffic increases. 

The figure above illustrates the overall 

emission benefits for all categories of 

vehicles. A comparison between the columns 

for the years 2007 and 2010 shows 

that in 2010 there is a very prominent 

reduction in CO and VOCs with respect 

to other pollutants. This is explained by 

the fact that CO and VOC emissions are 

principally produced by light vehicles 

and thus their overall trend is strongly 

affected by the respective trends of light 

Network Average Speed 

km/h 

100 

80 

60 

40 

20 

0 

4 Traffic Lanes 3 Traffic Lanes 

2007 2010 

In 2008 Autostrade per l’Italia also conducted 

the experiment in Lombardy 

regarding the A4 Turin–Trieste motorway, 

which is considered one of the focal 

points of the Italian road network due 

to its connecting the Iberian Peninsula 

and the Balkans, thereby making it one 

of the most trafficked motorways in Italy. 

The methodology proposed was applied 

only to the Milan–Bergamo section (34 

km) of the A4 motorway and presented 

a direct comparison between the current 

network with enhancements (four traffic 

lanes) and the previous carriageway 

layout (three traffic lanes). 

The conclusions of previous studies was 

confirmed, that is, that traffic fluidity 

that results from road enlargement 

increases the average speed and produces 

“flatter” driving cycles as well as 

significantly lower emissions of major 

air pollutants (CO = -35%, NOx = -13%, 

VOC = -14%, PM10 = -22%), as shown in 

the following figure. 

6 - 7 am 3 - 4 pm 5 - 6 pm 

9 - 10 pm 


Arcandor 

Action in the Supply Chain 

Since the nineties, retailers have been paying more and more attention to social 

responsibility in the supply chain. As there was extensive agreement on establishing 

common criteria of their individual procurement guidelines, it was only logical for 

them to pursue a cooperative effort. Originally under the umbrella of the Foreign 

Trade Association of the German Retail Trade (AVE), these efforts developed at the 

European level into the Business Social Compliance Initiative (BSCI). 

By Dr. Alexandra Hildebrandt 

10 


Best Practice 


The goal of the BSCI is to coordinate the 

varied efforts of its member companies 

to improve workers living and working 

conditions in the factories, bundle their 

experience and act faster and more efficiently 

together. In addition, a uniform 

stance towards suppliers, various stakeholders 

and governmental authorities 

gives the Corporate Social Responsibility 

(CSR) efforts more a higher emphasis 

and more power. So far (as of February 

2009), the BSCI already has more than 

250 members from 11 European countries 

and enjoys a high credibility and 

recognition in politics and business, both 

nationally and internationally. 

We are among the first BSCI members 

and have worked since the start of the 

Initiative on developing instruments to 

improve and check social standards in 

our supply chain. While the focus at first 

was on goods requiring a large amount 

of direct manual labour (clothing, home 

textiles, toys or shoes/leather goods), the 

focus of the Initiative changed to cover 

factories that are more technology-intensive 

such as hardware manufacturers. 

The BSCI process model helps suppliers 

improve the situation in their production 

sites through several successive 

steps. Starting with awareness raising, in 

which suppliers, through training, are 

exposed to the issue of social responsibility 

and standards. The next step the 

process requires a self-assessment. If 

this assessment is done honestly and 

thoroughly, and after good preparation, 

no unpleasant surprises are expected 

from the subsequent audit. 

Currently, twelve certified auditing companies 

are authorized to perform BSCI 

audits: These companies conduct their 

audits independently and according to 

BSCI standards. This ensures objectivity 

and comparability of final results worldwide. 

An audit is being conducted over 

the period of several days and finishes 

with a report, including a corrective 

action plan (CAP). 

Experience shows that carrying out the 

CAP in the set timeframe frequently 

causes difficulties. In order to address this 

problem we are working together with 

the supplier and carry out qualification 

measures in the form of special workshops, 

individual discussions or training 

for the suppliers and also help develop 

ideas and possible solutions on site. 

A re-audit after implementation of the 

CAP usually has two outcomes: 1) It 

confirms that the agreed measures have 

been carried out and the factory complies 

with all required social standards, or 2) 

it shows the need for further improvement. 

Once the audit is successfully 

completed it will be three years before a 

follow-on cycle audit is being conducted 

to ensure that the level achieved has 

been maintained. 

Regarding the financing of a BSCI audit, 

our company has decided that suppliers 

must pay the costs. Other BSCI members, 

which largely work with exclusive suppliers 

and/or whose portfolio of suppliers 

is much smaller and largely stable, bear 

the audit costs themselves. 

How do things look in practice? 

The CSR team directly cooperates with 

employees of the Asian purchasing agent 

Li & Fung. They are in direct in contact 

with the suppliers on organizational 

issues during the BSCI process and are 

also involved in the progress checks in 

our production sites. In addition, new 

suppliers without “Group experience” 

are looked at in a pre-check, the so called 

factory evaluation and are evaluated on 

their suitability and need for development. 

Due to the large number of Group suppliers, 

we started with the top revenue 

providers and are currently working 

with suppliers in the broad middle of 

the revenue range. Starting in 2010, we 

will also integrate suppliers with lower 

revenues into the BSCI audit process. 

The suppliers we are working with to 

improve social compliance have about 

two months to meet their audit obligation. 

A supplier can also always choose 

to undergo an audit independent of the 

CSR team’s program. 

In some cases it also happens that several 

attempts are needed before our factories 

are truly “socially compliant”. But it does 

not fit our understanding of responsibility 

and sustainability to drop a supplier 

simply because conditions in its factories 

do not fully meet our requirements. 

Exceptions are the “No-Gos”, which all 

our suppliers are aware of, such as child 

labour or forced labour. 

However, every “problem supplier” is 

looked at on an individual basis. In 2007 

for example, it came to our attention that 

a Chinese factory employed a worker 

that was only 15 years old (the legal 

minimum age is 16 in China). Since the 

family urgently needed her income and 

only a few months remained until her 

16th birthday, it was agreed to finance 

the girl’s school attendance and let her 

work reduced hours (as allowed under 

national laws) at full pay. The supplier 

was warned and received targeted individual 

training. 

But such pragmatic solutions cannot 

always be found for all participants. 

There are also suppliers who have no 

interest in improving conditions in their 

production sites. If these suppliers fail to 

show evidence of changes they made or 

proof of being compliant despite all our 

efforts, an escalation process is initiated. 

This extends from actions and interventions 

by the CSR team to the involvement 

of the responsible parties at Li & 

Fung and ultimately the buyers of the 

individual Arcandor Group companies 

doing business with these suppliers. If 

these measures do not bear fruit, then, 

in the interest of the Group and as a 

last resort, our words are followed by 

actions and the business relationship 

is ended. 


Bayer 

The Bayer 

Climate Program 

12 


Best Practice 

Environment 

We at Bayer consider climate change to be the most pressing challenge facing the world 

today. After all, climate change endangers the natural basis of all our commercial 

and social actions. The consequences for company policy are clear – in this time of global 

financial and economic crisis in particular, it is crucial that companies set a course that 

will steer them towards sustainability. This also involves making a clear commitment 

to climate protection. As part of our comprehensive climate program, Bayer is working 

to develop solutions across a range of areas that will enable the company to make a 

contribution to tackling the challenges posed by climate change. 

By Dr. Wolfgang Große Entrup 

As a founding member of the UN Global 

Compact, we support the objectives and 

principles of this initiative wholeheartedly 

and are also committed to pursuing 

our own initiatives to spread and 

implement these goals and principles 

worldwide. One central area of activity 

is environmental protection. This issue 

has long been given high priority at 

Bayer. As a company with international 

production operations, we believe the 

judicious use of natural resources is a 

major part of its corporate social responsibility. 

This is particularly true when it 

comes to climate protection and tackling 

climate change. 

As an emitter of greenhouse gases, the 

company is aware that it is part of the 

problem. For that reason, the Group 

took steps early on to implement improvements 

in its production processes, 

introduce new technologies, and opt 

for efficient combined heat and power 

generation in the field of energy supply. 

Between 1990 and 2008, Bayer was 

able to reduce its worldwide greenhouse 

gas emissions by 38 percent. In 2008, 

the company was the only member of 

the chemical-pharmaceutical industry 

headquartered in Europe to be included 

in the Climate Disclosure Leadership 

Index four times in a row. The Climate 

Disclosure Leadership Index is the first 

global climate protection index. 

The Bayer 

Climate Program 

• Clear commitment to climate 

protection 

• Lighthouse projects in the fields 

of buildings, agriculture and 

production 

• Further measures: company 

vehicles, business travel and IT 

• Bayer Climate Award and 

scholarships 

• Expenditure on climate-related 

F&E and projects: EUR 1 billion 

(2008-2010) 

However, Bayer is also part of the solution. 

Many of the company’s products 

contribute towards cutting energy consumption 

and therefore CO2 emissions. 

For example, materials from Bayer are 

used to provide effective insulation for 

houses and refrigerators, and to manufacture 

lighter-weight vehicles with lower 

levels of consumption. The materials 

themselves also display very good energy 

credentials – raw materials from 

Bayer that are used to manufacture polyurethane 

for insulation, for example, save 

more than 70 times the energy needed 

to produce them in the first place. 

The Bayer Climate Program 

Bayer is keen on playing an even more 

prominent role in addressing the climate 

issue and pursuing climate protection 

goals. To that end, the company launched 

the Bayer Climate Program at the end of 

2007. Scheduled to continue for several 

years, the program clusters the many and 

varied skills of the subgroups and service 

companies with the aim of boosting 

climate protection. Between 2008 and 

2010, Bayer will invest EUR 1 billion in 

climate-relevant research and development 

and various projects. 

The first lighthouse projects implemented 

under the auspices of the Bayer Climate 

Program are the EcoCommercial Build- 


Bayer 

ing – a global concept for zero-emissions 

buildings in the office and industrial 

sector – the Bayer Climate Check for 

analyzing and reducing greenhouse 

gas emissions in industrial production, 

and the development of stress-tolerant 

plants in the agricultural sector. This 

comprehensive program also includes a 

low-emission fleet of vehicles, increased 

use of cutting-edge video-conferencing 

technology to reduce the need for business 

trips, and energy-saving measures 

in the Group’s data centres. 

Bayer set itself emission targets to be implemented 

in the various sub groups. According 

to today’s estimates, the Group’s 

greenhouse gas emissions will remain at 

the level of 2007 up to 2020 despite an 

expected growth in production after the 

economic crisis will have been overcome. 

There are two more special initiatives we 

launched under our climate program. 

We founded the Bayer Climate Award 

to recognize the work of outstanding 

climate researchers. And we honor school 

students who have demonstrated a particular 

commitment to climate protection 

with scholarships. 

The EcoCommercial Building 

Energy consumption in buildings is responsible 

for around 20 percent of global 

greenhouse emissions. Bayer Material- 

Science is focussing on buildings in the 

office, industrial, and social amenities 

sector, a field that has remained somewhat 

neglected up till now. Working 

in cooperation with partners, the Bayer 

subgroup has developed the EcoCommercial 

Building, a new concept for zeroemissions 

buildings. Insulation materials 

are crucial to this project. Alongside the 

fact that the EcoCommercial Building 

generates its own renewable energies, 

these materials ensure that buildings of 

this type save energy and thus can fulfil 

their own energy needs independently 

– and achieve a CO2-neutral status as 

an annual average. 

What is special about this concept is 

that it can be adapted to the world’s 

different climate zones. In warm regions, 

buildings must be insulated against the 

heat, while in cool regions they must be 

protected against the cold. Bayer itself 

is constructing the first EcoCommercial 

Buildings in two different climate 

zones. The Group’s new administrative 

premises currently under construction 

near New Delhi will consume 70 percent 

less electrical energy than buildings 

constructed using methods common in 

this subtropical region of India. Meanwhile, 

in the more moderate climate 

of Germany, Bayer is building an emissionsneutral 

company kindergarten at 

its Monheim site. 

The Bayer Climate Check 

Bayer Technology Services developed the 

Bayer Climate Check with the aim of increasing 

energy efficiency and reducing 

greenhouse gas emissions in industrial 

production. This enables the company 

to run checks on production sites worldwide 

to determine their impact on the 

climate and identify areas where there 

is potential to cut emissions. The new 

feature of this tool is that it also includes 

the pre-production processes – raw 

materials, energy, and logistics – in 

the analysis. 

Bayer in figures 

Key businesses in health care, 

crop science and high-tech 

materials: 

• 108,600 employees* 

• Sales of EUR 32.9 billion* 

• 316 companies* 

• R&D budget 2009: 

EUR 2.9 billion 

* As at the end of 2008 

We use the Climate Check to examine 

over 100 production sites worldwide 

by the end of 2009, thereby recording 

information on around 85 percent of our 

greenhouse gas emissions. Steps will then 

be taken to make full and intelligent use 

of the potential savings identified. Initial 

results reveal that the Bayer Climate 

Check can help the Group to cut its current 

greenhouse gas emissions by around 

10 percent. In addition, the management 

also takes the Climate Check into account 

when making decisions on new investments. 

This new style of climate check is 

TÜV-certified and is also made available 

to other interested companies. 

Stress-resistant plants 

Climate change is threatening to further 

exacerbate issues such as heat and 

drought that are already reducing the 

agricultural yield of crops by up to 

80 percent. The world’s population is 

further growing, but the land available 

for cultivation is limited. Furthermore, 

the demand for biofuels is rising. The 

ultimate aim is to safeguard and even 

increase crop yields. As a result acricultural 

productivity has to be boosted 

significantly. Researchers from Bayer 

CropScience are seeking to make plants 

more resistant to stress factors such 

as drought, heat, cold, and soil salinity 

by unlocking the potential offered 

by biotechnology, for example. Bayer 

CropScience is also already supplying 

innovative crop protection agents that 

help to safeguard or increase crop yields, 

even under stressful conditions. 

Saving energy in further areas – 

company vehicles, business trips, 

and IT 

Bayer aims to cut greenhouse gas emissions 

from its company vehicles by 20 

percent by 2012. In the first year of the 

climate program, the accelerated introduction 

of company cars with lowconsumption 

engine technology and alternative 

drive systems (e.g., hybrid) in 20 countries 

resulted in a 5 percent reduction in associated 

greenhouse gas emissions. 

14 


Best Practice 

Environment 

The chemical park in Leverkusen 

Today’s cutting-edge video-conferencing 

technology offers an appealing alternative 

form of communication that dispenses 

with many of the disadvantages 

of teleconferencing. This technology 

means it is possible to generate life-size 

representations of video conference 

participants, creating a realistic meeting 

scenario and allowing non-verbal 

communication. In cases where there 

is no need for someone to be present 

in person, these telepresence rooms 

prevent staff from having to travel 

long distances to attend meetings. We 

have set up the first such so-called telepresence 

rooms equipped with the 

latest video technology at the Group 

headquarters in Leverkusen (Germany) 

and at the Pittsburgh site in the United 

States. Other key Bayer sites are set to 

follow suit. 

In every large company, IT also offers 

the potential for making sizeable energy 

savings. Using a range of measures, we 

have set ourselves the task of reducing 

the energy consumption of our three 

data centres located at the Group headquarters 

in Leverkusen and at the sites 

in Pittsburgh and Singapore also by 20 

percent by 2012. This project includes 

energy-saving concepts for server installation 

and computer usage and, in addition, 

reductions in paper consumption. 

To make optimum use of the current 

of air needed to cool computer chips, 

for example, computers will be set up 

in such a way that cold and warm air is 

kept apart as much as possible. 

Promoting scientific and social 

debate on climate change 

Bayer is employing two initiatives to promote 

scientific and social debate on the 

challenges posed by climate change, and 

to recognize specific personal achievements 

made in this area. The Bayer Climate 

Award is the first international 

prize for outstanding contributions to 

fundamental climate science research. 

The Bayer Science & Education Foundation 

presented the award for the first time 

in 2009 in Berlin to Professor emeritus 

Eberhard Jochem from the Fraunhofer 

Institute for Systems and Innovation 

Research in Karlsruhe (Germany). Professor 

Jochem, who was involved in the 

Intergovernmental Panel on Climate 

Change (IPCC) and other projects aimed 

at developing an international climate 

policy, was honoured for his pioneering 

technological and economic contributions 

to research into energy efficiency. 

He has demonstrated not only that it is 

possible to achieve an 80 percent increase 

in energy efficiency in the industrialized 

nations before the end of this century, 

but also that it is an economically viable 

proposition. The Climate Award has a 

prize fund of EUR 50,000 and is awarded 

every two years. 

Sustainability Camps organized by independent 

organizations open up opportunities 

to gain first-hand information 

about climate protection and to 

share views and opinions with other 

likeminded people. Each year, the Bayer 

Science & Education Foundation awards 

scholarships to school students so they 

can attend these events. In doing so, we 

recognize and reward the dedication 

shown by the people who themselves 

are the reason why it is crucial we are 

proactive in tackling climate change 

today – the generation of tomorrow. 


BASF 

1+3: Building a 

responsible value chain 

In China, there are over 32,000 chemical enterprises and many more if we consider the entire 

supply chain. Over 90% of the related companies are small and medium-sized enterprises 

(SMEs), which contribute strongly to the overall economic activities of the country but often 

find it hard to mobilise enough resources to effectively practise sustainable development. 

Thus, BASF in 2006 initiated a program called “1+3”, which mobilises and supports its 

partners and suppliers in China to improve their corporate social responsibility (CSR). 

16 


Best Practice 

Environment 

By JinXiu-Lucy Li 

BASF believes the effort of sustainability 

should involve the entire value chain. 

For example, the analysis of emissions 

and energy consumption should not be 

limited to only one single producer of a 

chemical, but should take into account 

the entire lifecycle of a product, from 

raw materials sourcing to disposal. If 

all suppliers and customers adopt green 

practices by maximising the "good inputs" 

and minimising the "bad outputs", then 

the whole supply chain would help in 

mitigating risks and speeding up innovations. 

The “1+3” CSR project is now gradually 

building up a responsible value chain 

by spreading and sharing the principles 

and practices of sustainability. To date, 

60 local and international companies in 

China are participating in the project, 

thus enhancing performance in, for example, 

environmental protection, health 

and safety (EHS) management. 

What does “1+3” stand for? 

The “1+3” CSR project was initiated by 

BASF in October 2006 as an innovative 

approach in supply chain management. 

It was launched as a program under 

the China Business Council for Sustainable 

Development (CBCSD). CBCSD is a 

coalition of leading Chinese and foreign 

enterprises registered and operating 

in China, established through the 

Ministry of Civil Affairs. It helps the 

World Business Council for Sustainable 

Development (WBCSD) shape the sustainable 

development agenda at the 

local level and also provides a platform 

for exchange and cooperation among 

businesses, government and social communities 

in China. 

A CBCSD member company like BASF 

forms teams with three types of business 

partners: customers, suppliers and logistics 

service providers – mostly SMEs – 

with the aim of promoting sustainability 

and giving guidance for best practices 

or customised solutions. Each of the 

three selected partner companies then 

introduces the same concept to a further 

three business partners in its own value 

chain: A snowball effect is created. 

BASF had six “1+3” partners participate 

in its first round, which concluded in July 

BASF has been a committed 

partner to Greater China since 

1885. It is one of the biggest 

foreign investors in the Chinese 

chemical industry. The company 

has approximately 6,300 

employees and operated 19 BASF 

wholly owned subsidiaries and 

10 BASF joint ventures in 2008. 

BASF’s sales in Greater China are 

about €4.2 billion. 

For further information, please visit 

www.greater-china.basf.com. 

2008. These were customers – Huafeng 

Group, Guangzhou Liby Enterprise Group 

Co., Ltd., Beijing Plaschem Trading Co. 

Ltd. and Zhejiang Kaipute Spandex Co., 

Ltd. – as well as a supplier – Zhejiang 

Qiming Pharmaceutical Co., Ltd. – and 

a logistics service provider – Sinochem 

International Corp. Currently, BASF is 

running the second round of the “1+3” 

CSR project. 

Dr. Jürgen Hambrecht, BASF chairman 

of the board, sees sustainability as a key 

factor to ensure long-term economic 

success. This is crucial, as the concept 

needs commitment at the highest level. In 

China, BASF is the chair of the Association 

of International Chemical Manufacturers 

(AICM), which aims to promote safe and 

clean practices in the manufacturing, 

distribution and use of chemicals. In 

December 2006, BASF, along with other 

member companies, such as Bayer, Dow 

Chemical, Exxon Mobil, Merck Chemical, 

Degussa Cyprus, Romania Gate Haas, DSM 

and the Shanghai-based China Europe 

International Business School (CEIBS), 

invited the leaders of 25 Chinese chemical 

enterprises to participate in training on 

EHS topics. This meeting instilled in them 

a strong awareness of the importance of 

sustainability as well as an understanding 

of how it could be implemented throughout 

their businesses. 

"Ambassador + expert": jointly 

ensuring sustainability 

If you strive to address a complex topic 

like sustainability, you need to get a feeling 

for your partner’s specific needs. That 

is why the BASF team started its work on 

the “1+3” project by sending questionnaires 

out to the partners, which helped 

them identify their areas for improvement. 

An expert team was then set up 

for each partner according to the chosen 

area of cooperation. These teams consist 

of a representative of the relevant BASF 

business unit – the “ambassador” – and 

one BASF “expert” in the specific EHS 

topic. This could be pollution prevention 

or occupational health and safety, 

for example. The teams then develop 

a tailored plan on how to improve the 

partners' sustainability management 

capacity and how to integrate the concept 

into their corporate strategies. 

For example, one common problem in 

China that “1+3” participants can address 


BASF 

is a lack of knowledge on how to obtain a 

Material Safety Data Sheet (MSDS), which 

is obligatory in China and describes the 

chemical and physical properties of a 

material and provides advice on safe 

handling and use of the material. 

Hands-on approach: 

BASF developed tailor-made programs 

according to “1+3” partners’ specific 

requests, ranging from seminars and 

training to site visits and implementation. 

Through these, partners started to 

see the bigger picture of how and where 

to improve their EHS areas in a systematic 

way. BASF also provided training for 

a Road Safety Quality Assessment System 

(RSQAS), which is a preventive program 

to strengthen the safety and reliability of 

chemical transportation in China. 

In so-called “Eyes for Safety” visits, the 

six BASF expert teams first went to inspect 

each partner’s production site in 

order to get a picture of the partner’s 

EHS status and make it aware of the 

areas which might have been overlooked. 

Then, the BASF experts and the partner’s 

EHS managers together identified priority 

cooperation areas. “The BASF visit 

provided good insight for our middle 

management on environmental protection 

and safety management,” said Mr 

Zhang Qiming, the Board Chairman of 

Zhejiang Qiming Pharmaceutical Co. Ltd. 

after an “Eyes for safety” visit. 

their improvement progress, which are 

then quickly addressed by BASF experts. 

This proved to be a very helpful tool for 

our partners to view their implementation 

as a long-term process and to ensure 

continuous improvement. 

During a “1+3” sustainability self-assessment 

seminar in July 2008 in Shanghai, 

senior executives from six “1+3” partners 

and the BASF project team attended a 

roundtable discussion. BASF experts 

presented detailed analysis on their six 

Responsible Care (RC) systems and best 

practices. This trust-filled sharing not 

only of good experiences but also of 

challenges and related problem-solving 

techniques with regard to practical implementation 

of sustainability aspects 

is another fruitful result of the whole 

project. All participating companies are 

committed to continue to implement 

their social responsibility objectives by 

putting more sustainability ideas into 

practice. 

The fruits of the “1+3” 

sustainability project 

Improving value chain competitiveness and 

creating new customer relations: 

By disseminating the “1+3” ideas and values 

to more partners, BASF continually 

broadens the platform for dialogue with 

them and puts an innovative customer 

relationship into practice. Mutual trust is 

established between the two parties, effectively 

laying the foundation for a longterm 

strategic partnership. This not only 

strengthens BASF's inter-departmental 

cooperation, but also reduces risk in its 

value chain. 

In the implementation phase, the project 

groups also provide training to address 

common issues faced by all companies. 

Every project group also reviewed one of 

their partner’s reform strategies. 

Sustainable solutions need 

staying power 

Sustainability solutions are usually implemented 

over a long-term period. This 

is why “1+3” aims to accompany our 

partners beyond the first year. In order 

to help our partners to ensure sustained 

improvement in their sustainability practices, 

BASF offers self-assessments in the 

form of a questionnaire asking about 

“Difficult times especially show that companies which conduct their business 

sustainably and responsibly are more successful in the long-term. That is 

why sustainability is a firm part of BASF’s strategy: Long-term success is 

not possible unless the environment and society are treated carefully. We 

are therefore committed to implementing the principles of the U.N. Global 

Compact.” 

Dr. Jürgen Hambrecht, BASF chairman of the board 

18 


Best Practice 

environment 

Raising awareness of sustainability amongst 

participating enterprises and satisfying their 

developmental needs: 

As China’s economy is increasingly integrated 

into the global economy, actively 

practising sustainability and integrating 

it into business practices has been essential 

to maintain core competitiveness. 

In this respect, BASF’s six partners all 

believe that the “1+3” project was just 

what they needed. They have benefited 

from the free access to advanced sustainability 

management techniques from a 

large multinational corporation such as 

BASF. The six enterprises have integrated 

the “1+3” concept into their corporate 

strategies by improving their employees’ 

workplace safety and their companies’ 

surroundings as well as strengthening 

dialogue with various stakeholders. They 

have also held seminars themselves on 

process safety management systems or 

sustainability practices. One partner has 

even submitted a proposal to the National 

People’s Congress aiming to promote the 

“1+3” concept. At the same time, the six 

partners have kept focused on emissions 

reduction in the production process and 

promotion of the sustainability concept 

in their own supply chains. 

the 1+3 program 

MeMBer CoMPanY 

suPPlIer 

all participating companies are 

committed to continue implementing 

their social responsibility objectives by 

putting more sustainability ideas 

into practice at the conclusion event to 

"1+3" project in July 2008. 

China Business Council for 

sustainable development 


CustoMer 


ContraCtor 

Role-model effect: 

In January 2008, the United Nations 

Global Compact named the BASF “1+3” 

CSR project a case study that was then 

shared among members and enterprises 

worldwide. In China, Zhai Qi, executive 

secretary-general of the China Business 

Council for Sustainable Development 

(CBCSD), believes that “1+3” has already 

become a model for the dissemination of 

sustainability principles throughout the 

Chinese economy because it has proved 

particularly successful among small and 

medium-sized companies. 

The snowball effect 

goes on… 

After the successful implementation of 

the “1+3” CSR Project, BASF launched the 

"Golden Bee" concept with China WTO 

Tribune to further promote sustainability 

in China. The analogy of honeybees was 

chosen because the bees naturally create 

a win-win situation. BASF, together with 

China WTO Tribune and China Ocean 

Shipping (Group) Company, announced 

the "2007 Golden Bee CSR China Honor 

Roll" in April 2008. Sixty of the 205 participating 

enterprises were honoured as 

pioneers and role models, based on their 

corporate governance, overall business 

performance and CSR practices. 

BASF firmly believes that shouldering 

sustainability challenges leads to stronger 

competitiveness. Since China’s ambitious 

sustainable development goals cannot 

be achieved by large companies alone, 

BASF hopes that more local enterprises 

will gradually join in to share their sustainability 

practices with a large number 

of small and medium-sized companies 

along their supply chain – just like a 

bee disseminating pollen. Following 

this model, the partners benefiting from 

their involvement in the project would 

commit to continuing the “1+3” model 

– which means the number of partners 

will soon triple, and so on. If this process 

continues to replicate itself, a new 

paradigm can be created. The practice 

of the “1+3” model could influence all 

businesses and eventually the entire 

society. 


CapGemini-Naandi Collaborative Partnership 

Creating an Impact 

on Education for Girls 

in India 

With girls representing two-third of the world’s uneducated children and women 

representing two-thirds of the world’s illiterate adults, it has been acknowledged that 

successful education for girls and women is a necessary mechanism for breaking the cycle 

of poverty, myths, and social norms, for ensuring the well-being and health of children, 

and for the long-term success of developing countries. 

By Carolyn E. Nimmy and Cecilia Schrijver 

20 


Best Practice 

human rights 

Capgemini Group & naandi foundation 

Whilst education in India is free, the 

materials to support that education are 

not. These materials includes uniforms, 

clothes, notebooks, and personal hygiene 

products – expenditures that underprivileged 

families are often unwilling or 

unable to make for their daughters. 

Project Nanhi Kali is a participatory project 

where individuals, groups, and companies 

are encouraged to sponsor the education 

of girls. The Nanhi Kali project is jointly 

managed by the Naandi Foundation and 

the K.C. Mahindra Education Trust. The 

Capgemini Group is currently the second 

largest corporate sponsor of the Nanhi 

Kali project, we support the education 

of over 10,000 girls in India. 

The birth of a successful 

employee-led initiative 

What started as a friendship between 

Capgemini India and Capgemini Norway 

while looking for ways to support the 

Rightshore® (Offshoring) strategy and 

to promote understanding and cooperation 

has now grown into a truly global 

Capgemini Group program and a strong 

Naandi-Capgemini relationship. 

uK 

• Program deployed 

• Supports 2,250 girls 

• naandi ASE 

north aMerICa 

• Coming soon 

BelGIuM 

• Coming soon 

PortuGal 

• Christmas Card initiative 

norWaY 

• naandi norway launched 



• Art Camp and Auction 

CaPGeMInI unIversItY 

event 

• naandi Awareness 

event, June 2008 

• Supporting 80 girls 

netherlands 

• Executive Dinner 

• Event supporting 300 

girls 

• Power of 10 initiative 

will be deployed 

CaPGeMInI GrouP 

• Successful E-Card 

Initiative and IWd 

Celebration Initiative, 

2007 / 2008 

• Supporting 146 girls 

fInland 

• naandi integrated in 

leadership development 

• Program to be launched 

soon 

GerManY 

• Art Camp Event & 

auction 


sWeden 



slovaKIa 

• SiSp Rightshore 

• Supports 18 girls 

IndIa 


• Supports > 1,000 girls 

australIa 

• Program deployed 1 st 

december 2008 

• Supports 80 girls 

“Many companies have a long history of supporting social projects often driven 

by a philanthropic dimension enabling an ability to ‘give back’ to society. 

this approach has changed with companies now aligning their Corporate 

responsibility and sustainability approach to their corporate strategy.” 

Carolyn nimmy, vP, Cr & sustainability lead, Capgemini Group 

Today, Capgemini Group and over 10 

countries in the Group are supporting 

the Nanhi Kali project. Several different 

initiatives and schemes have been 

implemented. For example, Capgemini 

India, Norway, Sweden, United Kingdom, 

Australia, Slovakia, as well as Sogeti India 

have adopted the project as a formal community 

initiative. Within those offices, a 

payroll contribution system has been set 

up in which employees have the ability to 

voluntarily contribute to the Nanhi Kali 

project and either individually or collectively 

sponsor the education of a Nanhi 

Kali. Capgemini Norway in particular has 

taken a big step through its collaboration 

with the Naandi Foundation and has 

jointly established its first foundation 

outside of India – Naandi Norway. Many 

of these initiatives are being matched by 

Capgemini, ensuring a combination of 

employee passion and company commitment 

to the Nanhi Kali project. 

Capgemini Finland works together with 

Naandi in their leadership development 

programs and other countries in the 

Group such as Germany, the Netherlands 

and Portugal have launched successful 

initiatives. 

“What’s really worked is the fact that 

there are a lot of Naandi evangelists in 

the Capgemini world! Each country office 

now has an ambassador for Naandi and 

there’s nothing more credible than one 

of your employees – who has been there, 

seen it, and done it – coming back and 

talking about it,” explains Manoj Kumar, 

CEO of the Naandi Foundation. 

Capgemini a people company 

Throughout our 40-year history, Capgemini 

has built its business upon strong ethical 

values that underpin our approach 

to all aspects of our business. Joining 

the UN Global Compact in 2004 was 

a natural extension of these values in 

ensuring we remain a responsible business. 

As a global company and with our 

current growth in developing countries, 

we are aware of the different challenges 

that need to be faced, such as Human 

Rights standards, opportunities for education 

and employment, and the need 

for respect and understanding of different 

cultures. 

Signing up to the ten principles of the 

Global Compact adds to how we can 

contribute and leverage our skills, our 

people, and our know-how to make a 

difference. Our partnership with the 

Naandi Foundation is based on our belief 

that major community programs with a 

strong alignment to a business strategy 

have a far greater impact. Joining the 

forces of our employees with organizations 

such as the Naandi Foundation to 


CapGemini-Naandi Collaborative Partnership 

help others strengthens our team spirit, 

improves communication, and gives us 

a better understanding of the communities 

around us. 

Capgemini has a strong desire to support 

diversity – gender diversity in particular. 

We believe that diversity and the 

elimination of discrimination are key to 

our long-term business health. Working 

with the Naandi Foundation and supporting 

education for girls in India has 

made gender-specific issues more visible 

to all employees and gives our people 

the opportunity to be actively involved. 

This too supports our commitment to 

the first and the sixth principles of the 

UN Global Compact, which concern the 

protection of internationally proclaimed 

Human Rights and the elimination of 

discrimination with respect to employment 

and occupation. 

Our partnership with the Naandi Foundation 

offers Indian girls dignity, education, 

equality, and empowerment – the same 

attributes that our people seek for themselves 

and the company they work with. 

Through our community programs, we 

have the ability to bring the UN Global 

Compact principles, our values, and our 

own business principles alive. 

Capgemini’s community focus 

Aligning our corporate responsibility and 

sustainability approach with our corporate 

strategy provides benefits through 

enhanced reputation, greater consumer 

and employer brand-awareness, as well 

as attracting and increasing employee 

engagement, which have a longer-lasting 

and more effective impact on the community. 

At the heart of our business strategy, 

we focus on creating a diverse, engaged, 

and skilled workforce; developing strong 

client relationships; developing our Rightshore® 

approach; and supporting the 

development of India as a long-term and 

viable business location. 

Our initiatives are aligned to three core 

themes: Education – our conviction 

is that education is the key to helping 

countries and communities develop; 

Diversity – a source of richness and 

competitive advantage; Growth – our 

growth in the developing world brings 

specific duties and is especially relevant 

for our current strategy in India. 

Our partnership with the Naandi Foundation 

is strongly aligned with our business 

purpose and community strategy. 

Not only does it make business-sense 

and ensures employee engagement and 

motivation, we are above all supporting 

the education of many girls in India and 

have a positive community impact. 

Enabling cultural understanding 

and awareness 

Our corporate strategy and Rightshore® 

approach has enabled us to work with 

countries such as India. Our partnership 

has enabled us to change the way we 

think and embrace multiculturalism 

as we become a truly open and diverse 

company that is focussed on changing 

the lives of the girls we support. 

As a global multicultural company, we 

celebrate many different religious festivities. 

For the last two years, we have run 

a holiday season e-card initiative lasting 

from Diwali to the Chinese New Year 

(taking in Christmas, Eid, Hanukkah, 

and Thanksgiving). In the initiative, our 

people are invited to send e-cards to family, 

friends, colleagues, and clients. For 

every 1000 e-cards sent, the Capgemini 

Group funded the education of a girl in 

India. Last year 75,000 e-cards were sent 

and this year 113,000 e-cards. The e-card 

artwork used was made by the girls in 

India through various Art Camps run 

by Capgemini Germany and Norway, in 

which our people spend a day working 

with the children on art pieces. 

Capgemini also actively promotes International 

Women’s Day around the 

Group and we ran an online campaign in 

support of the Naandi Foundation. Our 

people were invited to express support 

for the Nanhi Kali initiative through a 

simple online click – for every 250 clicks, 

“Government statistics in India 

reveal that only three out of 

10 girls who enter elementary 

school complete 10 years of basic 

education. Research has shown 

that the reason for this dropout 

may be as minor as the girl child 

not being able to afford a uniform 

to go to school and could include 

more complex factors like girls 

taking on the responsibility of 

household chores at a very 

young age as a result of gender 

stereotyping” 

Nanhi Kali Project, 2009 

the Group supported the education of 

a girl in India, translating into 33 more 

girls who received support. 

Our simple but effective e-card and click 

campaigns have allowed us to demonstrate 

that, although we may have a consistent 

delivery model across the Group, 

22 


Best Practice 

Human Rights 

we actively make room for everyone and 

create awareness around our differences. 

The marked uptake of participation in 

the e-card and click campaigns shows the 

success and enthusiasm of our employees 

in supporting the Naandi Foundation. 

Because the take-up of the Naandi 

Foundation around the Group has been 

fostered at a grassroots level – without 

mandating initiatives or pushing 

particular diversity platforms onto our 

people – we are changing the way we 

think about diversity. Very soon most of 

our home-grown executive talent will 

have been impacted and touched by the 

program – already, many people have 

visited the girls we are supporting. 

Enabling the development of 

leadership skills 

Community projects can be used to develop 

leadership skills and multicultural 

awareness, both of which are necessities 

in today’s global business world. Such 

programs often require little investment 

when compared to the returns generated, 

but they have the valuable ability 

to accelerate skill-building, cultural 

awareness, pride, and commitments 

whilst maintaining engagement in tough 

times. 

We have integrated the Naandi Foundation 

into our people development at our 

Capgemini University to help illustrate 

to our people the link between the community, 

the importance of diversity, and 

enabling multicultural understanding. 

We are instilling diversity into our DNA 

through people’s appreciation of our 

work with the Naandi Foundation. 

Capgemini Finland successfully launched 

the “Leading Together” program in 2008, 

which is based on a collaboration between 

Capgemini Finland and India. The 

training program intends to impart the 

efficiency of Rightshore® collaboration by 

using the Naandi Foundation as a learning 

vehicle. The teams were charged with 

the assignment of creating an innovative, 

out-of-the-box strategy to help raise the 

visibility of the Naandi Foundation, both 

inside and outside Capgemini. 

Community program as a 

key differentiator over tough 

competition 

Community programs can also be a great 

means to collaborate with clients. For 

example, joint sponsorship or matching 

programs can involve both client and 

supplier by building increased collaboration 

but also by generating pride and 

a sense of shared achievement amongst 

the client/supplier teams working together. 

Our Norwegian team started working 

with the Naandi Foundation in relation 

to the growth in business being delivered 

out of India. Business growth came when 

we extended the Naandi Foundation to 

client partnerships, whereby each Indian 

employee participating in a client account 

results in a girl being supported 

by both the client and our Norwegian 

affiliate. One of our clients in Norway 

chose Capgemini for its capability and 

also indicated that Capgemini Norway’s 

corporate social responsibility (CSR) practice 

had been an important component 

in selecting a supplier. It was Capgemini’s 

support of the Naandi Foundation 

in India that become a key differentiator 

in winning the deal. Capgemini 

made a commitment whereby for every 

person working on the client account, 

Capgemini would sponsor a schoolgirl; 

the client subsequently agreed to match 

Capgemini’s commitment. This is a great 

example of CSR in action and the difference 

it can make to clients, employees, 

and the community. 

Client engagement is the ultimate accolade 

for this type of program, and to 

have clients willingly agree to join in 

our program and sponsor girls in India 

is a strong endorsement. “In the case of 

Capgemini Norway, Capgemini registered 

as a charity, known as Naandi Norway, 

the first Naandi outside of India. As a 

result, Capgemini Norway now has a 

very interesting profile in Norwegian 

society. Norway’s parliament knows 

about the relationship with Naandi, as 

does Norway’s media. And potential 

Norwegian employees know about it 

as well as current and potential clients. 

So while following passion the initiative 

has also been converted into a business 

opportunity to raise the profile of the 

company in Norway and win business. 

To my mind it’s a fantastic way of how 

you can start with just a link to a charity 

and take it to a new level,” says Manoj 

Kumar, CEO of the Naandi Foundation. 

Enhancing employee engagement 

During these uncertain times, the need 

to motivate and keep employees engaged 

has never been more vital. Research 

has shown that high employee engagement 

has a direct impact on the bottom 

line. For many years, employee survey 

results have been analyzed to identify 

key drivers or opportunities to increase 

people engagement. Our Capgemini 

Global Group Employee Survey 2008 

shows that our community work is a 

key driver in employee engagement and 

retention of talented people. Employees 

often enjoy participating in community 

programs, making them proud of what 

their company is doing. In the more 

socially aware environment of today, 

we can mark the shift from feel-good 

programs to those that are aligned to 

the corporate strategy and are designed 

to ensure motivation. 

Our relationship with the Naandi Foundation 

in India and our support for the 

Nanhi Kali project has helped us contribute 

to a better livelihood for the 

more unprivileged groups in society. The 

partnership has not only enabled over 

10,000 girls in India to have the right 

to education, it has also brought along 

several business benefits, including support 

for our Rightshore® strategy, building 

client intimacy, ensuring employee 

engagement, and helping our people 

understand the importance of human 

rights, the combat against discrimination 

and the value brought along by cultural 

differences. 


Carrefour 

For you, for us – 

Carrefour Commits Itself 

Since 2001, Carrefour Colombia has adhered to the United Nations Office on Drugs and 

Crime (UNODC) program for the voluntary, gradual eradication of illicit plantations. In 

another project, in Bangladesh, the focus is on the workers of controlled products suppliers. 

Training helps them learn more about their labour and Human Rights. 

By Helene Jessua 

The first best practice is about encouraging 

farmers to give up illicit cultivation: 

The idea is to assist those who have given 

up coca cultivation so that they can earn 

adequate incomes legally. This program 

consists of convincing Colombian farmers 

who cultivate illicit coca to change 

to products that are mainly consumed 

in their country, such as beans, cacao, 

palm hearts, coffee, honey, coconuts. 

To achieve this, and to ensure adequate 

income to farmers, it is important that 

a company can ensure the marketing 

of these substitution products. Thus, 

within the framework of the UN program, 

Carrefour has implemented practices already 

in place in other countries, such as 

guaranteeing a minimum price to enable 

farmers to live decently and committing 

to this in the long term. 

The products are selected under the UN- 

ODC Alternative Development Products 

program and by the Colombian government’s 

Presidential Agency for Social 

Action. In some cases, the United States 

Agency for International Development 

(USAID) is also involved in the project. 

After checking farmers’ compliance with 

the “zero illicit” policy, the products are 

presented by the UNODC to Carrefour 

Commercial and Social Responsibility 

teams. Carrefour also offers technical 

support on quality, logistics, and packaging 

provided by its commercial team. To 

promote the products, Carrefour communicates 

in-store and places signs on 

the shelves next to the products, which 

state: “For you, for us, Carrefour commits 

itself. In buying this product, you also 

support the UN and national government 

program for substitution of illicit 

cultivation.” 

Two examples of projects 

supported by Carrefour in the 

program: 

Agroamazonia was created in mid-2001 

by six associations of farmers that signed 

an agreement for the substitution of 

illicit cultivation, in line with the National 

Alternative Development Plan, 

which today is called Plan Colombia. 

The palm heart of Putumayo produced 

by Agroamazonia was the first product 

listed by Carrefour within the framework 

of the program in 2001. Agroamazonia 

includes 332 families and 660 hectares of 

palm. The project has thus enabled the 

eradication of more than 600 hectares 

of coca cultivation. 

Carrefour also works with Ecolsierra, a 

network that brings together more than 

700 families located in Sierra Nevada de 

Santa Marta (north of Colombia), who 

work to strengthen their productivity 

whilst implementing sustainable 

ecological agriculture methods. These 

families produce organic honey and 

coffee. Through application of these 

clean production methods, conservation, 

recuperation, and protection of natural 

resources can be achieved. 

24 


Best Practice 

Human Rights 

Situation of the program today 

Today, within the program, Carrefour 

offers 45 products in its Colombian stores 

and works with 12 suppliers representing 

more than 3000 families from the 

most disadvantaged area in the country, 

which is also most affected by illicit cultivation. 

In November 2004, Carrefour 

Colombia received a special prize by 

the UNODC for its global contribution 

within the program for the voluntary, 

gradual eradication of illicit plantations. 

This UN civil society program rewards 

organizations and individuals who have 

contributed to the eradication of drugs 

and crime, corruption, and terrorism in 

the civil society. This was the first time 

the award was given to a company. 

Best Practice 2: Training of workers 

in Bangladesh 

The Carrefour Group has been committed 

to the respect of Human Rights 

throughout its supply chain for more 

than 10 years. To this aim, the Group 

has been working with the International 

Federation for Human Rights (FIDH) since 

1998 and drew up a Social Charter in 

2000 signed by all its controlled products 

suppliers, who are audited on their 

compliance with it. Because training and 

awareness-raising of workers are key for 

improvement of working conditions in 

the factories, Carrefour and FIDH decided 

to launch a training project in Bangladesh 

with a local NGO, Karmojibi Nari (KN). 

The aim is to give the workers better 

knowledge about fundamental rights 

at work. The program was initiated as a 

pilot project in 2004 and then launched 

in 2006 as a three-year project with the 

objective of targeting all Carrefour's suppliers 

in Bangladesh. 

This three-year “fundamental rights at 

work” training program is named “To 

Ensure Decent Workplace for Better 

Livelihood and Increase Productivity.” 

Trainings sessions target three 

different groups, in the following 

order: 

1| Top-level management: Through a 

two-hour discussion at the Carrefour 

office in Dhaka, Carrefour and KN 

explain the content of the program 

and discuss with factory owners the 

importance of training workers about 

their rights and responsibilities, as 

well as the link between social compliance 

and increased productivity. 

2| Mid-level management training: This 

is a one-day on-site training with a 

main focus on gender discrimination. 

This training is to help the participants 

become more aware of what it 

means to be well-behaved, motivated, 

and heedful towards workers, how to 

find problem resolutions, and how 

to achieve productivity maximization. 

This training is key, as conflicts 

between workers and their direct 

supervisors are common, with the 

majority of supervisors being mainly 

men and about 75 percent of the 

workers being women. 

3| Workers: The aim of this training 

is to inform workers of their rights, 

and to build their capacities in collective 

bargaining, organizational 

skills, and conflict resolution. This 

training consists of a one-day on-site 

training session. Each training group 

is composed of workers both selected 

by the management and randomly 

by KN. Those workers receive five 

copies of the leaflets, which contain 

information about: the right to an appointment 

letter (contract); the service 

book; ID cards; wages; working hours; 

occupational health and safety; leaves 

for sickness, maternity, holiday, and 

festivals; duties and responsibilities. 

The leaflets are then distributed to 

other workers and they are assigned 

the task of disseminating what they 

have learned. 

Concrete results 

The management has increasingly realized 

the importance of having women 

as supervisors. KN noticed that workers 

show a genuine interest in knowing 

about their legal rights. After the training, 

workers become aware of the rights 

they have under the law and become 

more conscious of issues such as sexual 

harassment and complaint procedures. It 

was found that in some factories, workers 

asked for their rights and concrete 

changes happened in some workplaces 

following their demands (maternity leave 

with wages, overtime rates, canteen facilities, 

etc.). Without this program, no 

local NGO would ever have been allowed 

to access the factories and educate the 

workers within the workplace. The challenge 

now is to find ways to reach out 

to all workers. 



Lowering CO2 emissions 

in Company-wide 

effort to protect the 

environment 

Coca-Cola Hellenic, the 

largest independent bottler 

of Coca-Cola products in 

Europe, is constructing 15 

Combined Heat and Power 

(CHP) units in 12 countries 

as part of a companywide 

plan to significantly 

reduce CO 2 

emissions in its 

operations. 

Coca-Cola Hellenic estimates that the 

amount of energy used in its operations, 

involving production facilities, cooling 

equipment and transportation, is currently 

approximately 890,000 tonnes 

across 28 countries. The figure has been 

cut by 28% over the past 5 years, and it 

is expected that initiatives now being 

undertaken will result in a further reduction 

of 20% by the end of 2010. The CHP 

plants are the cornerstone of Coca-Cola 

Hellenic’s energy reduction strategy, 

which is being instituted throughout all 

operations, involves all employees, and 

engages suppliers, customers, governments 

and local community organisations. 

Construction is being undertaken in 

cooperation with the US-based firm 

Contour Global, a leading developer 

of energy-efficient systems which use 

natural gas and capture and reuse heat 

from power generation. The units provide 

all power needs, including heat, 

cooling and electricity, and also capture 

CO 2 

, for industrial use. Excess electricity 

will be delivered to the national grid. It 

is anticipated that when the units are 

completed in 2010, they will achieve 

an annual reduction in CO 2 

emissions 

of more than 20% across all production 

facilities. 

“The decision to construct the 15 CHP 

plants was announced in early 2008 as 

part of the Company’s overall commitment 

to Corporate Social Responsibility 

(CSR), to the sustainable development 

of its operations, and to the communities 

it serves,” said Doros Constantinou, 

Managing Director of Coca-Cola 

26 


Best Practice 

Environment 

Hellenic. “Construction of the plants is 

now progressing as the necessary permits 

are granted, and the first of the plants 

is scheduled to be opened in June in 

Romania, followed by Northern Ireland 

in September. 

The plants are being built in 11 countries: 

Greece, Italy, Northern Ireland, Romania, 

the Czech Republic, Poland, Austria, 

Slovakia, Nigeria, Ukraine, and Serbia. 

The pilot plant has been running successfully 

since 2006 in Hungary. 

At ceremonies to announce the construction 

plan, Mr. Günter Verheugen, EU Vice 

President and European Commissioner 

for Enterprise and Industry, extended his 

strong support in his role as cofounder 

of the European Alliance for CSR. Mr. 

Verheugen said, “Coca-Cola Hellenic is an 

active member of the CSR Alliance. This 

initiative shows that the Alliance is not 

about words but about changing reality. 

It demonstrates that environmental and 

economic goals can be pursued in unison. 

It also demonstrates how innovation is 

not just a driver of economic competitiveness, 

but can also underpin business’s 

contribution to wider societal goals, such 

as the fight against climate change.” 

Mr. Doros Constantinou said that 

Coca-Cola Hellenic made the decision to 

build the CHP plants following impressive 

results achieved with a pilot CHP 

plant at the company’s bottling facility 

in Hungary. The first of its kind for the 

European beverage industry, the plant 

was introduced at the Dunaharaszti bottling 

facility in 2006, and in its first year 

of operation, achieved a reduction in CO 2 

emissions of 43%, equivalent to more 

than 18,000 tons of CO 2 

. At the same time, 

on the environment of its operations 

generally. Other energy-saving initiatives 

in bottling plants, for example, include 

new cleaning regimes that use cold water 

instead of hot, along with the installation 

of energy efficiency technologies 

and energy saving devices. 

The Group is also applying efficiencies 

in offices and other facilities, such as 

warehouses and storage areas, introducing 

lower-energy computers and 

energy-saving power and lighting systems. 

Employees are informed about 

the importance of environmental protection 

and encouraged to engage in 

energy-saving practices – at work and 

at home. 

Care is taken in transportation. Vehicle 

engines are being downsized, alternative 

fuels are being used, hybrid technology 

is being explored, and drivers are being 

trained in ecologically friendly methods. 

Efficient route planning and avoidance 

of unnecessary travel or deliveries by air 

are further scaling back energy usage. 

energy costs were reduced by €400,000. 

It is anticipated that each of the new 

plants will realise similar reductions 

and savings, with each plant gaining at 

least 40% energy efficiency. 

Conserving Energy 

As the 15 new CHP units come on-line, 

they are expected to make a major contribution 

to the efforts being made by 

Coca-Cola Hellenic to reduce the impact 

Action is also being taken in making 

cooling equipment, a primary source 

of indirect emissions, more climatefriendly. 

Working together with suppliers, 

Coca-Cola Hellenic is introducing new, 

low-energy cooling units. Refrigerant gases 

such as hydrofluorocarbons (HFCs) are 

being eliminated, while alternative, low 

impact gases, like hydrocarbon (HC) and 

CO 2 

technology, are being introduced. 

In addition, sales representatives are 

trained to work with customers, monitoring 

the condition of their coolers, 

informing them about efficient energy 

use, and helping them to reduce their 

own carbon footprints. In carrying out 

energy-saving activities, the Group seeks 

to cooperate with governments and the 

communities it serves. Among the relationships 

engaged in is the UN Global 

Compact Caring for Climate, the largest 

global business coalition on climate, and 

participation in events such as the World 

Business Summit on Climate Change. 


Danfoss 

Improving the Working 

Environment 

In August 2006, Danfoss acquired the factory of Chinese company 

Qinbao, a manufacturer of brazed plate heat exchangers that is located in 

Hangzhou, approximately 150 km southwest of Shanghai. 

By Gerhard Teschl 

Within only five years, Qinbao had been 

able to build a strong position within 

the Chinese market and was therefore, 

from a strategic standpoint, of interest 

to Danfoss. As a part of the internal 

standardized merger and acquisition 

process, Danfoss carried out a working 

environment and safety audit to identify 

and analyze gaps between the Group’s 

mandatory corporate safety standards 

and those of the newly acquired company. 

Although the company lived up well to 

national standards, the audit revealed 

significant deviations from Danfoss’ 

corporate standards. These deviations 

can be summarized in the following 

categories: 

• Insufficient personal protection equipment 

• Missing, inadequate, or defective safety 

protection for the semi-automated 

equipment 

• Insufficient workshop safety 

• Insufficient training and visualization 

of safety and environmental issues 

Since safety and environmental issues are 

a top priority for Danfoss management, 

an action plan was developed to address 

and eliminate the nonconformities 

within a tight, targeted time frame. 

Activity 1: Establish personal safety 

protection for workshop employees 

and visitors 

At the time of the Qinbao takeover, the 

personal protection equipment was insufficient 

and none of the employees 

were obliged to wear protective equipment 

in order to protect their personal 

health. 

Depending on the work station and area, 

Danfoss enforced a rule that employees 

must wear ear plugs, safety shoes, eye 

protection, working clothes, gloves, or 

masks. This has not been easy as it is 

not always comfortable for workers to 

wear these items, especially gloves and 

masks in environments where the climate 

is hot. 

Activity 2: Upgrade or retirement 

of semi-automated production 

equipment 

Previously, Qinbao experienced several 

work-related accidents and injuries. 

Especially the cutting, punching, and 

pressing process regularly led to serious 

injuries. Although no official statistics 

were kept, former management and 

employees admitted that these accidents 

were frequent and that there were few 

consequences for the company. 

Within the first two months after the 

acquisition, Danfoss implemented safety 

sensors, protection fences, and safety 

push buttons for all cutting, pressing, 

and punching machines. In phase two (after 

12 months), a majority of the presses 

were exchanged with modern presses. 

Currently, the focus is on increasing the 

degree of automation for the punching 

equipment, which will help in eliminating 

entirely the potential for those types 

of injuries. 

Activity 3: The workshop safety 

When Danfoss took over Qinbao, the 

workshop was small and dark and the 

equipment and working stations were 

squeezed in between one another. Heavy 

heat exchangers were manually lifted 

and transported by the employees. 

In early 2007 the lighting and product 

handling were improved, and the workshop 

was divided into different zones 

for transportation and safety reasons. In 

28 


Best Practice 

Human Rights 

indicator for the individual performance 

systems of all blue-collar employees. In 

general, three stages of awareness have 

been observed at the company: 

1| Reluctance to wear safety protection 

and to follow safety rules 

2| Compliance and awareness-raising 

through audits, (small) penalties, and 

rewards 

3| Understanding and appreciation of 

safety and personal protection and 

safe/comfortable working environment 

through frequent training and 

permanent visualization of safety 

improvements 

These three stages are well-described by 

Xu Zhihua, who has worked at Qinbao on 

the bolt-welding station since 2004. 

Qinbao: The production and challenges in terms of the working environment 

The brazed plate heat exchangers that Qinbao manufactures are made of 

stainless steel and copper. The typical production process consists of cutting, 

pressing, washing, assembling, brazing, welding, testing, and packing. The 

finished product weighs up to 150 kg and the plates and product corners are 

sharp. Some areas of the workshop have high noise levels; in other areas, 

heavy products are being lifted. This means that there are several working 

issues to be addressed in the working environment. 

2008 the company was moved to a new 

facility, where the workshop environment 

and safety standards lived up to 

Danfoss’ corporate standards. The 6S system 

(Sort, Stabilize, Shine, Standardize, 

Sustain, and Safety) was implemented 

throughout the workshop. At the new 

facility, it is not just about raising the 

safety level but also about addressing 

the personal comfort levels of the employees. 

Activity 4: Training,visualization, 

and awareness-raising of safety 

Along with improving personal safety 

of the employees and upgrading the 

machines and the workshop facilities, 

it has been very important to train and 

visualize safety issues in order to create 

long-term awareness. 

Now both veteran and new employees 

are systematically trained to handle 

equipment and meet the safety standards. 

Each machine and working station 

is marked with signs describing which 

safety devices the employees must wear 

as well as how installed safety equipment 

on machines must be used. Safety charts 

in the workshop record the status and 

improvements in the working environment 

and safety levels. 

Daily 6S audits help to reinforce and raise 

awareness about safety issues. In 2007, 

compliance with safety standards also 

became an important key performance 

“These safety devices do give us a great 

protection against serious injuries, and 

now I know that Danfoss not only provides 

us with a working place to make 

money. The company cares about unusual 

details – for China – such a wearing 

safety devices. But we can work here 

happily and healthily. So I am full of 

energy while working in the plant.” 

Two years after the acquisition, Danfoss’ 

safety and environmental standards have 

been fully and successfully implemented 

at the former Qinbao factory. In 2009, 

Danfoss Qinbao aims to have its environmental 

management system certified 

according to ISO 14000. 

The example of the Qinbao takeover has 

proven that, even in a challenging environment, 

well-described and standardized 

safety and environmental standards 

can be implemented successfully within 

a reasonable time frame and without 

compromising these issues. 

The success is measurable: In 2008, the 

company had one minor and one serious 

accident, which is a decline of 60 percent 

in comparison to 2007 statistics, and a 

major improvement over previous years. 

Over the last six months, Danfoss Qinbao 

has been entirely accident-free. 


Deutsche Bank 

The microfinance 

revolution has only 

just begun 

Microcredits have proven to be powerful instruments in the fight against poverty. 

However, they will reach their full impact only if they manage to limit their reliance 

on the charitable sector. 

By Hanns Michael Hölz 

“The genocide brought the destruction 

of my parents’ retail shop“, Nsengiyma 

Gilbert from Rwanda explains. “It ended 

in ruins and in the brutal killing of my 

father. After the war, I dropped out of 

school, crisscrossed Kigali in search for a 

job to no avail. Then the idea of selling 

milk to a nearby kindergarten school 

near my home came to me. However, 

the earnings from this business were 

not enough to buy me a refrigerator and 

enable me to rent a bigger place to start a 

restaurant,” Gilbert says. “I tried to get a 

loan from other banking institutions, but 

the conditions were a little too harsh and 

couldn’t provide an immediate solution 

to my desperate situation. That’s when a 

friend of mine told me about RML quick 

loans,” he explains. 

RML is the abbreviation of Rwanda Microfinance 

Limited, a company founded 

in 2004 in order to provide loans to 

low-income salary earners and microentrepreneurs. 

RML provided Gilbert 

with a business loan of about $500, and 

things improved. He bought a refrigerator 

for his dairy products and moved 

to a bigger place that he turned into a 

restaurant. The income generated from 

his restaurant business helped him build 

a decent home for his mother. “This 

business has served as a lifeline for me 

and my family‘s financial and social 

livelihood. Now my aged mother will 

no more spend sleepless nights when it 

rains,” he affirms. With additional support 

from RML, Gilbert plans to expand 

his business. 

Supporting early-stage microfinance 

institutions (MFI) 

RML is part of Micro Africa, an East African 

microfinance group based in Nairobi, 

Kenya. In mid-2006, RML had not 

yet reached operational self-sufficiency 

and had a total loan portfolio of half a 

million dollars. But then the Deutsche 

Bank Start-up Fund provided a letter of 

credit in the amount of $100,000, which 

secured a Rwandan franc loan from a 

local lender. Since receiving the loan, 

RML has become profitable and now 

serves over 1,400 clients with a portfolio 

of over $1.4 million. 

The Deutsche Bank Start-up Fund, which 

is supported by the Deutsche Bank Americas 

Foundation and CORDAID, a Dutch 

NGO, seeks to identify start-up microfinance 

institutions (MFI) in underserved 

markets with strong management. Capitalized 

through grants and soft funding, 

it provides flexible financing to support 

portfolio growth and works to build 

governance and financing capacity. Like 

all the other microfinance instruments 

developed and used by Deutsche Bank, 

the Start-up Fund does not lend to the 

final borrowers, but gives financial and 

logistics support to microfinancing institutions. 

By transferring capital and 

know-how, it strengthens regional economic 

structures and networks in order 

to stabilise developing countries. 

A powerful instrument in the fight 

against poverty 

Microfinance, the extension of very small 

loans to those who lack collateral or a 

credit history, is proving to be a revolutionary 

model in enabling people to rise 

from poverty. It is based on the recogni- 

30 


Best Practice 



Deutsche Bank 

According to db research, women 

make up the vast majority of 

borrowers, especially in Asia. It reflects 

the fact that women are more reliable 

debtors because, due to stronger social 

and family ties, they often follow a 

more conservative investment strategy 

which in turn results in lower default 

rates for MFIs. 

tion that the working poor can act in 

an entrepreneurial manner and are, in 

principle, creditworthy. As a study by 

Deutsche Bank think tank db research 

illustrates, for these micro-borrowers, 

microcredit is often the only alternative 

to paying excessive interest rates 

charged by unofficial moneylenders or 

pawnshops in developing countries. For 

instance, in the Philippines loan sharks 

often charge an annualised interest rate 

of up to 1000% for a monthly loan. In 

contrast, interest rates charged by MFIs 

are in the range of 15% to 70% p.a. Seen 

from the perspective of a developed 

country, this may still seem high, but 

these rates result from the small size of 

loans and the high administrative costs 

as loan officers need to travel to remote 

places and intensively advise clients. It 

is estimated that administrative costs 

amount to up to two thirds of the interest 

paid by clients. In addition, there is 

a need for risk provisioning. 

According to db research, women make 

up the vast majority of borrowers, especially 

in Asia. This reflects the fact that 

women are more reliable debtors because, 

International Comparison: Impact of Deutsche Bank Microfinance Funds 

(Deutsche Bank Microcredit Development Fund, Global Commercial 

Microfinance Consortium & Start-Up Fund) 

Total Microcredits: USD 309,883,956 

400,000 

300,000 

200,000 

100,000 

90,000 

200 

0 

100,666 

Number of clients 

Average loan size USD 

527 

310,189 

460 

192,639 

due to stronger social and family ties, 

they often follow a more conservative 

investment strategy, which in turn results 

in lower default rates for MFIs. This 

lower credit risk is further supported by 

634 

93,060 

Africa & Middle East Asia Latin & South America Eastern Europe & Russia USA 

2,889 

260 

6,655 

6,000 

4,000 

2,000 

600 

500 

400 

a relatively low degree of labour mobility 

of female clients (due to strong family 

ties, women tend to work from home), 

which decreases the cost of monitoring 

debtors for an MFI. 

0 

32 


Best Practice 


In order to influence borrower behaviour, 

many MFIs apply the principle of group 

lending. This entails an MFI making a 

small loan to an individual who belongs 

to a group of 5 to 20 people. As soon as 

the individual borrower proves reliable, 

credit is extended to additional people 

within the group. This procedure creates 

an incentive for the group to monitor 

each other’s behaviour and ensure borrower 

discipline, as the group is jointly 

liable for the failure of any single member 

to repay her microloan. The average 

loan size starts from USD 100 and can 

reach several hundred dollars, depending 

on the debtor’s repayment history. 

Interest rates vary significantly according 

to the geographic regions, e.g. in India 

microloans are usually granted at 15% 

to 30%. 

However, not all MFIs apply the group 

lending principle; instead, some MFIs 

prefer to lend to individuals without any 

shared liability aspect. This reflects, inter 

alia, the argument that group lending 

has some shortcomings, e.g. that it only 

fully works in rural settings where social 

control is higher. In addition, opponents 

of group lending argue individual lending 

is superior, as it judges people on 

their own merits rather than on the 

group’s. In some countries, individual 

lending exhibits higher average loan 

amounts and often primarily serves the 

self-employed rather than the very poor 

seeking to start a business. As db research 

sums up, both approaches have their 

advantages and respond to different 

circumstances; hence, it can be expected 

that individual and group lending techniques 

will continue to coexist over the 

long term. 

Deutsche Bank – 

a microfinance pioneer 

Among commercial banks, Deutsche 

Bank is a pioneer in the field of microfinance. 

As early as 1997, the company 

established the Deutsche Bank Microcredit 

Development Fund (DBMDF) in 

order to help established microfinance 

institutions reach scale and long-term 

sustainability by encouraging relationships 

with local financial institutions. 

The DBMDF is a registered 501 (c) 3 

non-profit. It provides catalytic funds 

as collateral for leverage loans, typically 

2:1, and is supported by social investors, 

private clients of Deutsche Bank, and the 

Deutsche Bank Americas Foundation. 

The Global Commercial Microfinance 

Consortium, established at the end of 

2005, is an $80.6 million fund that serves 

as a platform to combine high risk catalytic 

development agency resources with 

the scale and execution efficiency of the 

private sector. Deutsche Bank created the 

Consortium in recognition of the pivotal 

roles that the private sector can play in 

the development arena in partnership 

with development agencies. In so doing, 

the Consortium harnesses resources 

available through the growing corporate 

social responsibility sector as an investment 

rather than as an expense. 

db Microfinance-Invest No. 1 – 

the next step in microfinancing 

However, the microfinancing instrument 

will reach its full impact only if it manages 

to limit its reliance on the charitable 

sector and turn into a regular business 

highly attractive to the private sector. 

Against this backdrop, three branches 

of Deutsche Bank – Private Wealth 

Management (PWM), Corporate Social 

Responsibility (CSR) und Asset Finance 

& Leasing (AFL) – have developed a 

product which addresses economic and 

philanthropic customer interest at the 

same time: db Microfinance-Invest No.1, 

the first securitization of subordinated 

microcredits with an external rating 

worldwide. The securitization transaction, 

which has a total volume of EUR 

60 million, was completed in 2007 and 

is the first German investment product 

which gives retail and institutional investors 

access to the ever-growing asset 

class ”microfinance“. The securities were 

purchased not only by Deutsche Bank 

but also by KfW-Entwicklungsbank (the 

largest institutional investors) as well as 

retail clients, foundations and church 

institutions. Deutsche Bank and its partners 

agreed upon a fee structure that 

is attractive for investors; for example, 

99.6% of the total investment volume 

is used to support microcredits. 

Senior notes in db Microfinance-Invest 

No.1 were assigned a BBB rating by Fitch 

Ratings. The portfolio comprises 21 microfinance 

institutions and banks in 15 

countries in Africa, Latin America, the 

Caucuses, Central Asia and Southeast 

Asia. The diversification of the MFI-Portfolio 

was compiled by Deutsche Bank’s 

New York Center of Competence and the 

Community Development Finance Group 

in Africa, Asia, Latin America, eastern 

Europe and central Asia. The fund’s 

goals include the provision of reasonably 

priced debt that garners full or partial 

equity credit without increasing clients’ 

weighted average cost of capital. This 

enables MFI clients to present a fairer 

picture of their financial strength to 

investors. The subordination layer should 

also enable clients to attract senior debt 

through strengthened equity ratios. Many 

microfinance institutions are also in the 

process of transforming themselves from 

unregulated into regulated financial 

entities, and db Microfinance-Invest’s 

subordinated debt provides quasi-equity 

that helps MFIs to meet their regulatory 

requirements in the transformation 

process. 

Throughout the world, Deutsche Bank 

seeks opportunities to play a positive 

role in addressing local needs by making 

available financial resources, the talents 

of its personnel and the leadership of 

its management. All of these efforts are 

geared toward forming lasting partnerships 

with community-based organizations 

to achieve durable and lasting 

benefits for local citizens. A combined 

Deutsche Bank Americas Foundation 

and Community Development Group 

carry out the firm’s corporate citizenship 

commitments in the Americas. The microcredit 

initiatives are an integral part 

of Deutsche Bank’s CSR activities and a 

recognized best-practice project in the 

framework of the Global Compact. 



The Green Imperative 

Deutsche Post DHL became a signatory to the UN Global Compact in June 2006. At 

that time, we sought to align our sustainability commitment and approach with key 

external international standards. In our effort to be a responsible corporate citizen, 

our overall sustainability approach focuses on environment and in particular climate 

protection, education and disaster management. 

Implementing new trailer designs to 

save fuel and reduce carbon impact 

34 


Best Practice 

Environment 

By Steffen Frankenberg 

Implementing environmental responsibility 

continues to be a challenge and 

opportunity for us as we seek ways to 

adapt our business processes and culture 

to addressing the environmental challenges 

we face today. 

Our environmental strategy has three 

pillars: 

• Tackling climate change 

• Improving our overall environmental 

performance 

• Minimizing our use of natural 

resources 

Tackling climate change 

As the world’s leading mail and logistics 

company, we transport billions of shipments 

each year to over 220 countries 

and territories, operating one of the 

world’s largest transportation fleets; we 

recognize that our largest environmental 

impact is CO 2 

emissions. We are making 

a concerted effort to effectively address 

this impact. 

In 2008, we launched our GoGreen 

Program and became the first logistics 

company to commit to clear climate 

protection targets. Our goal is to improve 

our carbon efficiency by 30% by 2020 

in our own operations and those of our 

subcontractors, compared to our 2007 

baseline. We have entered into discussions 

with our subcontractors on ways 

to measure and reduce their footprint; 

and have taken the first steps towards 

achieving our 2012 milestone of a 10% 

CO 2 

efficiency improvement in our own 

operations. 

To deliver on our carbon efficiency commitment 

we are focusing on five areas: 

As a responsible 

corporate citizen 

Deutsche Post 

DHL's overall 

sustainability 

approach focuses 

on environment 

and in particular 

climate 

protection, 

education 

and disaster 

management. 

1. Ensuring transparency: 

We need to be transparent about our 

carbon footprint to help us track our 

progress and identify opportunities to 

minimize it. The ability to calculate our 

own carbon footprint is a key prerequisite 

of our GoGreen Program. We also 

need the data to responsibly offset our 

GoGreen products and services, and in 

time, to calculate our customers’ individual 

footprints. In time, we will use this 

data to help our country teams manage 

emissions locally. 

2. Increasing CO 2 

efficiency: 

Minimizing our carbon footprint through 

targeted initiatives and by introducing 

innovative technologies for our own operations 

and our subcontractors we can 

effectively improve our CO 2 

efficiency. 

For example, in the UK, we introduced 

200 teardrop trailers which consume 

12% less fuel than conventional trailers. 

Globally we operate about 800 alternatively 

fuelled vehicles. We are constantly 

renewing our air and road fleet. We are 

also optimizing our network and transport 

planning e.g. with an electronic 

freight exchange system (EFX), and the 

utilization of our subcontractor fleet 

saving two million truck miles, equivalent 

to 3,000 tons of CO 2 

. We have also 

bundled our innovation activities into 

the DHL Innovation Center, in cooperation 

with IBM, SAP, MIT to develop 

innovative logistics solutions including 

‘green’ solutions. By doing so, we can 

actively promote the development of 

innovations such as electric and hybrid 

vehicles, aerodynamic solutions or new 

generation fuels to improve fuel and 

CO 2 

efficiency. 

3. Mobilizing our employees: 

Raising awareness of climate and environmental 

protection issues, and enabling 

our employees to minimize their impacts 

is critical to the successful implementation 

of our climate protection program. 

Our Save Fuel program provides driver 

training to approximately 50,000 drivers 

in Germany to help them reduce their 

fuel consumption by as much as 6% by 

the end of 2009. An internal employee 

‘environmental idea’ campaign generated 

more than 11,000 ideas from employees 

to improve our CO 2 

efficiency. 

Our getGREEN Associate Incentive Program 

in the US aims to educate and 

reward employees for making environmentally-sound 

choices in their everyday 



Employee involvement in addressing 

climate change is a key aspect of our 

global GoGreen Program. 

lives through monetary incentives to 

purchase non-conventionally fuelled vehicles 

such as hybrids or energy-efficient 

household appliances. In addition, for 

every five employees who take part in 

the program, we donate US$500 to The 

Nature Conservancy’s ‘Plant a Billion 

Trees’ campaign. 

We are also making changes to our 

company policies to ensure that, over 

the long term, our consideration for 

the environment is integrated into the 

business decision-making process. In 

Germany, we have revised our company 

car policy removing the worst polluting 

cars from those available for selection, 

increasing the period of usage and maximum 

mileage, and included a provision 

to encourage and incentivize individuals 

to make more environmentally-friendly 

choices. By the end of 2009, we will 

have implemented an e-Learning module 

to raise awareness of the climate 

change challenge. The goal is to help 

our employees better understand the 

importance of their role in addressing 

this challenge. 

4. Generating value at the market: 

Our GoGreen product portfolio offers 

customers services to assess, reduce and 

offset their emissions. For example, we 

designed a new refrigerated distribution 

hub for a key customer in the food 

manufacturing industry in the USA to 

maximize sustainability and energy efficiency 

by building it 30m underground. 

The facility uses 65% less energy than 

comparable above ground facilities; saves 

approximately 681,000 liters of fuel and 

reduces CO 2 

emissions by approximately 

1.8 million kgs annually. In 2008, we 

expanded our GoGreen carbon neutral 

service making it available in over 25 

countries in Europe and Asia. We also 

offer carbon consultancy services to create 

and execute greenhouse gas reduction 

strategies for DHL customers. 

5. Preparing for regulatory changes: 

We are engaging with the legislative 

process to help shape regulation that 

brings long-term environmentally-aware 

changes to our sector. It is clear that 

sooner, rather than later, there will be 

a price on CO 2 

emissions. It is important 

that in general, resources and CO 2 

emissions 

are priced adequately leading to 

efficient allocation of resources rather 

than to increased costs. By engaging 

with the regulatory process we want 

to be able to provide input to policies 

that could influence how our industry 

impacts the environment. 

Improving our overall 

environmental performance 

Although climate change is our largest 

environmental impact, we are also 

addressing our other environmental 

impacts. We have implemented an Environmental 

Management System to 

ensure that we were addressing our other 

environmental impacts. To date, approximately 

46 % of our global workforce 

now works under ISO 14001-certified 

Environmental Management Systems. Examples 

of business units with improved 

ISO 14001 coverage, include our MAIL 

business in Germany that earned ISO 

14001 certification for all of its operations. 

The certificate covers over 159,000 

employees and is valid for 49 operational 

districts, which include 82 mail and 

33 parcel centers. DHL Express Europe 

widened its certification coverage from 

44 % of sites in 2006, to 80 % in 2008 – 

covering 43,000 employees in 717 sites. 

In Asia-Pacific, DHL Global Forwarding 

achieved certification of its entire operations, 

covering over 10,000 employees 

at 199 facilities in 14 countries. We 

will continue to expand the coverage of 

our environmental management system 

throughout our organization. 

Minimizing our use of natural 

resources 

We spent over €9 billion in 2008 on 

products and services, of which almost 

€2 billion was spent on energy (fuel and 

36 


Best Practice 

Environment 

electricity). This considerable purchasing 

spend provides us with an opportunity 

to influence the sustainability of our 

own supply chain. In 2008, we revised 

our supplier code of conduct to include 

environmental considerations. This Code 

is part of all new contracts with suppliers. 

Early in the procurement process 

we request that our suppliers commit 

to the Code before proceeding. Our request 

for information form sets out the 

environmental expectations we have 

of our suppliers, and forms the basis 

for discussing alternatives. To support 

its implementation, we have developed 

guidance notes for our procurement 

teams and trained more than 500 of 

The DHL Innovation Center pioneers 

innovative logistics solutions to 

deliver economic and environmental 

efficiencies. 

Acting decisively 

on climate 

change is now 

a key initiative 

in our group's 

global and 

longterm agenda. 

our buyers on the content of our Code 

in 2008. 

We are also continuing sustainable sourcing 

initiatives which we initiated last 

year such as vehicle fleet procurement, 

“greener” IT, and paper sourcing. Our Procurement 

organization, for example, has 

significantly increased the percentage of 

recycled and sustainably-sourced paper 

it purchases, in line with the guidance in 

our Corporate Paper Policy, to over 80 % 

in 2008. We will now take further steps 

to implement the use of recycled paper 

across our organization worldwide. 

Conclusion 

2009 marks an important milestone on 

climate change with the UN Climate 

Conference in Copenhagen (COP 15)– 

aimed at setting action on climate change 

as a global priority. For Deutsche Post 

DHL, 2009 marks the year in which our 

Group’s climate protection program, 

GoGreen becomes firmly cemented in 

our company’s 2015 strategy and a key 

performance indicator for our company’s 

overall performance. Acting decisively 

on climate change is now a key initiative 

in our Group’s global and long-term 

agenda. 

The Danish Ministry of Foreign Affairs 

recently appointed DHL as the official logistics 

partner providing carbon neutral 

logistics services at UN Climate Conference 

in Copenhagen. We are proud to 

be an active part of this event and this 

achievement demonstrates to us that 

our GoGreen Program is steering our 

company in the right direction. At the 

same time, we recognize that we may 

not have all the answers and that we 

are counting on our business partners 

to embark on this journey with us. Yet, 

we realize waiting to act is not an option 

and that as a leader in our industry we 

have the power and obligation to set 

the pace. We are doing our best to lead 

by example. 

To find out more on Deutsche Post DHL’s 

climate protection program, GoGreen, visit: 

www.dp-dhl-gogreen.com 

To find out more about our sustainability 

commitment and programs, visit: 

www.dp-dhl.com/sustainability 


DonG Energy 

A Nationwide charging 

network for electric 

vehicles in Denmark 

Our modern lifestyles offer a wealth of exciting possibilities, but also go hand in hand with 

high energy consumption. Because of the carbon footprint that our energy consumption 

leaves behind, there is no longer any reason to doubt that our lifestyles affect the climate. 

Each and every one of us, including DONG Energy, is responsible for minimizing our 

energy consumption and maximizing our consideration for the environment. As an energy 

company, we have a special responsibility for producing energy in as environmentally 

friendly a manner as possible. 

By Anders Lyngtorp, M. Sc. Techn. Soc. 

We aim to triple our renewables capacity 

by 2020. That is a major challenge in 

itself. Despite these measures, our power 

plants will remain an essential part of 

our energy supply for the foreseeable 

future in order to provide reliable supplies 

of energy. Therefore, we need to 

identify efficient methods for reducing 

CO 2 

emissions from our power plants, 

which are among the most efficient in 

the world. We have removed almost every 

pollutant from the flue gases. Now we 

are focussing on the CO 2 

challenge. Our 

long-term objective is clear – providing 

reliable energy without CO 2 

emissions. 

Therefore, we are engaged in developing 

a range of projects that support this 

objective. Examples of these projects are: 

wind power generation; production of 

second-generation bioethanol; co-firing 

with biomass when generating combined 

heat and electricity; capturing and storing 

CO 2 

; employing geothermal energy 

as a supplement to district heating; and 

generating energy via solar energy, hydro 

power, or wave and tidal energy. 

We are constantly trying to improve 

our competitiveness and expand our 

presence in the northern European energy 

market – particularly through 

growth outside Denmark. The growth 

will be underpinned by a whole series 

of identified, well-defined investment 

options that have been chosen because 

they support our long-term objectives, 

utilize skills and existing market positions, 

and enable synergies across the 

entire Group. 

Recently, we entered into an agreement 

with Siemens to supply up to 500 wind 

turbines – with a total capacity of up 

to 1800 megawatts – for our planned 

offshore wind farms in northern Europe. 

This agreement is the largest single offshore 

wind turbine supply agreement 

ever, and it strengthens our leading position 

within offshore wind energy. Finally, 

it is an important tool for implementing 

our strategy of significantly expanding 

DONG Energy's position within the sustainable 

energy sector. 

Nationwide charging network 

In 2008, DONG Energy formed a cooperation 

with Better Place in Denmark. By 

doing so, DONG Energy became partner 

in a program for rolling out a nationwide 

charging network for electric vehicles in 

Denmark. The project provides optimum 

exploitation of renewable energy, which 

until now has been impossible to store, 

and also saves CO 2 

. 

As a geographically small country, Denmark 

has relatively low transportation 

needs. There is a high car-registration 

tax on conventional cars, but apart from 

VAT, there are no taxes on electric vehicles, 

making Denmark an ideal loca- 

38 


Best Practice 

Environment 

with 5.4 million inhabitants and some 

2 million passenger cars, the entire passenger 

car fleet could thereby be run on 

electricity produced by less than 750 

windmills. 

But as the wind is not blowing constantly, 

we have also estimated that even if all the 

electrical charging of cars was sourced 

from coal-fired power plants, net CO 2 

emissions would still decline by half. The 

reason is partly that electric motors are 

far more efficient than even the most 

modern combustion engines, and partly 

that the energy efficiency of our power 

plants is high. 

tion for launching an electric vehicles 

program. 

The goal of Better Place is to reduce CO 2 

emissions from the transport sector by 

implementing a charging infrastructure 

for electric vehicles. DONG Energy is 

shareholder in a Better Place operator 

in Denmark and will be supplying the 

energy to drive the electric vehicles. In 

close cooperation with DONG Energy, 

Better Place Denmark will be responsible 

for building an electric-car-charging network 

as well as a control centre that will 

communicate wirelessly with the cars in 

order to optimize the charging behaviour 

in relation to hourly fluctuations 

of market prices for electricity. Thereby 

it can be ensured that if a car is plugged 

into the carport socket outlet at 5 p.m., 

it will not start charging until late at 

night when general energy consumption 

is at its minimum – or alternatively, at 

times of the day or night when there is 

a surplus of energy. 

The infrastructure will include thousands 

of charge spots per region: in private 

homes, workplaces, and public locations 

throughout a deployment area. The 

charge spots are supplemented by a network 

of battery-switch stations that allow 

drivers to exchange a depleted battery 

for one with a full charge, in less time 

than it takes to fill a tank with petrol. 

That said, as the vast majority of driving 

trips are shorter than the 150-km range 

possible with a fully charged EV-battery, 

most customers will use charge spots as 

their primary source of energy. 

Charging electric cars with power 

We estimate that one medium-sized 

windmill with a 2 megawatt capacity 

on an annual basis can supply the energy 

needed for 3000 cars. In a country 

About DONG Energy 

However, the more wind power we have 

in our production mix at any given time, 

the higher the reduction in CO 2 

emissions 

will be. An additional benefit will come 

from the fact that most charging will 

take place at night when wind power 

is in excess supply. This means that it 

will be possible to use wind energy for 

transportation purposes that otherwise 

would have to be exported to neighbouring 

countries, typically at relatively low 

prices. 

Ultimately, the transition to an electricvehicle-based 

transportation system powered 

by renewable energy will lead to a 

reduction of CO 2 

emissions to the benefit 

of our climate. 

DONG Energy is an integrated energy company that operates across the 

entire energy value-chain, with a presence in a number of important markets 

in northern Europe – Germany, the United Kingdom, Norway, the Netherlands, 

Sweden, Poland, and Denmark. The company’s core business activities 

are: natural gas and oil exploration and production; production of thermal 

and renewable energy; natural gas and power sales; and distribution in the 

wholesale market and to end customers. More than 5000 employees are 

doing their best to fulfil the ambition of securing stable energy supplies for the 

company’s different markets. 


E.ON 

R&D driving the 

sustainable future 

of energy 

The world of energy is currently facing its potentially greatest challenge since the invention 

of electricity. This is being fuelled by three fundamental development trends. Firstly, demand 

for energy is continuing to increase. The IEA estimates that there will be about a 50 percent 

increase in demand for primary energy worldwide by 2030. This will require massive 

investments in energy generation. Secondly, climate change and the real threats it involves 

demand unrelenting action in support of global climate protection. Thirdly, the fact that 

fossil resources are not unlimited means that energy has to be treated even more responsibly. 

By Erik Brandsma 

Dealing with these seemingly irreconcilable 

conflicts – i.e. breaking the correlation 

between growth and energy 

consumption – requires a fundamental 

transformation of the energy sector and 

a new understanding of how we generate, 

distribute and use energy. New innovative 

technologies are key to making this 

happen. These range from tapping more 

into the potential renewables have to offer, 

successfully realizing carbon capture 

and storage, developing more effective 

energy storage systems and flexible distribution 

right up to devising intelligent 

solutions for increasing energy efficiency 

in residential homes. 

When it comes to R&D in forwardlooking 

energy technologies, E.ON is 

committed to attaining a leading position 

in its industry. On the one hand, 

E.ON wants to act as a catalyst between 

basic research and the energy sector’s 

day-to-day business and so accelerate 

the transformation of new ideas into 

marketable products and processes. In addition 

to that, we are forging ahead with 

the development of key technologies 

ourselves. As a successful international 

group, E.ON has unrivalled first-hand insight 

into the demands and requirements 

from the field. Accordingly our R&D 

strategy focuses on optimization of our 

facilities and processes with innovative 

solutions, development and commercial 

implementation of strategically relevant 

key technologies ("innovate.on") and 

promoting of research at universities 

and institutes around the world. 

Our activities to promote research focus 

on challenges for which fundamental 

solutions have to be found or which are 

at the very beginning of their research 

cycle. E.ON therefore supports the “E.ON 

Energy Research Center” (ERC), a public 

private partnership with RWTH Aachen 

University, which, among other areas, is 

researching into storage and efficient 

integration of renewable energies into 

the existing power supply. Today renewables 

cannot supply baseload power, as 

the wind does not always blow without 

interruption and the sun does not shine 

around the clock. We therefore have to 

develop innovative storage technologies 

to be able to store energy from renewable 

sources to make it available without 

interruption. The independent ERC is 

also conducting research into intelligent 

network systems, which enable the flexible 

use of renewables across borders and 

allow power generated decentrally to be 

fed into networks on demand. The findings 

remain the property of researchers 

and are published to be accessible in the 

public domain. 

Beyond that, regarding the pressing challenges 

of today’s energy sector, another 

objective is to make clean-coal technologies 

available on an industrial scale. If 

40 


Best Practice 

Environment 

out at sea, and maritime energy technologies, 

such as tidal and wave power 

plants as well as the generation of bio 

natural gas on an industrial scale. And 

given the future application of nuclear 

power, we also have to develop the next 

generation of nuclear power plants. They 

will then have to provide the greatest 

possible level of inherent safety and 

even higher protection against external 

influences. 

We have pooled these and other issues 

within our technology initiative “innovate.on” 

and, thanks to our international 

footprint in 30 markets, we are able to 

distribute tasks effectively and learn 

from each other. One example is that, as 

a group in Germany, we can benefit from 

the experience in wind energy which 

has been gathered in the UK and Spain, 

while our customers in Italy and the US 

stand to gain from German expertise in 

coal technology. 

innovate.on 

efficient ecological energy 

Future Fossil Fuel 

Power Plants 

High 

Efficient 

Coal 

Power Plant 

Carbon 

Capture 

Storage 

Nuclear 

Generation 

III+ 

this is to be achieved, we have to increase 

the thermal efficiency of coal-fired 

power plants considerably. However, the 

greatest challenge when it comes to low 

carbon is undoubtedly the low carbon 

power plant based on CCS technology. In 

capturing CO 2 

, we are currently pursuing 

three technologies but are concentrating 

on the “post combustion process”, as it 

Renewable Energy 

Wind 

Offshore 

Upgraded 

Biogas 

Marine 

End Use 

Efficiency 

Gas Heat 

Pump 

is easier to retrofit into existing power 

plants and can also be made available 

to other countries. In Europe we are 

working on establishing a fleet of pilot 

plants and intend to make CCS technology 

commercially viable by 2020. 

Further technological challenges include 

building offshore wind farms, even far 

As part of our commitment to push these 

fields of research and development, E.ON 

has once again considerably increased 

its investments in new technologies to 

support universities, research, development 

and demonstration plants, which 

amounted to € 106 million in 2008, after 

€ 83 million in 2007 and € 57 million in 

2006. The successes we have been able to 

claim reaffirm our conviction to continue 

with our broadly based R&D activities 

to find solutions for sustainable energy 

generation, distribution and use. 

R&D is also a field of action which affects 

different parties involved in the energy 

sector – government, universities, research 

institutions, industrial companies 

as well as the energy industry – and 

requires a joint effort to master the considerable 

challenges ahead. This applies 

for Germany and Europe, but also worldwide 

when it comes to the application 

of new technologies for global climate 

protection, where concerted actions by 

governments, companies and financial 

institutions are needed. 


Ernst & Young 

Diversity and 

Inclusiveness at 

Ernst & Young 

By Sabine Moron and Karin Sahr 

We recognize difference as a way of 

harnessing the individual and combined 

talents of our people. That is why D&I 

has been declared one of our ten global 

priorities. We live in an increasingly 

global economy, where multicultural 

(and often virtual) teams are the norm 

rather than the exception. We need to 

take into account the new mix of cultures 

and individual characteristics that shape 

our workforce and the different work 

styles that build our talent pool. At the 

same time, our clients and markets have 

become more diverse themselves, and 

we must mirror this diversity in more 

than just claims and quotas. As business 

challenges become more complex, 

solving them requires us to call on the 

widest spectrum of views and opinions. 

Our global D&I strategy aims to create 

structures in which these positive 

effects of a diverse workforce can be 

leveraged. 

The 6th principle of the UN Global Compact addresses 

the elimination of discrimination in respect of 

employment and occupation. At Ernst & Young, we not 

only believe in that goal from a moral perspective: We 

are convinced that Diversity and Inclusiveness (D&I) are 

actually a business must. That is why we do more than 

just look for ways to prevent or eliminate discrimination; 

we actively promote diversity as a value crucial to our 

company. 

However, it is important to recognize that 

the ability to cooperate across cultures 

does not come overnight. We are all 

biased – it is a part of human nature. 

While the abstract concept of diversity 

as a value might seem plausible to a 

lot of people, the actual confrontation 

with different points of view, different 

personal values, different ways of 

dealing with projects and problems on 

a day-to-day basis can easily create confusion 

and frustration. If not managed 

properly, the risk is high that the possible 

positive effects will never be uncovered. 

Instead, whoever represents the majority 

or the highest hierarchy level in the 

42 


Best Practice 


team could make decisions according 

to their belief-system, which can lead 

to discrimination against those who do 

not share it. This is why it is not enough 

to just have a diverse workforce – it 

is important to create awareness and 

develop the necessary skills to avoid 

frustration and discrimination and to 

leverage diversity’s benefits. 

We recognize that there is no fast-track 

or short-cut for D&I. That is why there 

are various initiatives on the office, 

country, area and global levels to address 

these issues in a comprehensive 

and sustainable way. In Germany, the 

roots of our D&I strategy go back to the 

long-existing program GROW – Growth 

and Retention Of Women. The program 

focuses on leveraging female leadership 

by providing networking and mentoring 

opportunities, events and quarterly 

measurements of gender equity, which 

are used as an important indicator in the 

German sustainability strategy. GROW 

has laid a solid foundation for our D&I 

initiative, and the heart of the program 

remains a priority within D&I. However, 

the definition of relevant diversity factors 

within our organization has widened. 

The challenge we are facing today lies 

in adjusting activities to that new scope 

as well as coordinating and streamlining 

our global activities. 

One important step was the creation 

of the new position of D&I Partner for 

Germany, Switzerland, and Austria (GSA). 

Ana-Cristina Grohnert’s task is to integrate 

the various programs across GSA 

and define innovative actions connected 

to our global D&I vision and priorities. 

For GSA, we have decided to set the first 

focus for the next 18-24 months on the 

aspects of gender management and crosscultural 

communication. We believe this 

will help drive broader benefits across 

all other Diversity groups. We are defining 

Diversity on a much broader basis 

than just the official 6 aspects which 

anti-discrimination laws address (gender, 

age, ethnic background, religion, sexual 

orientation and disabilities). For us, Diversity 

also includes cultural aspects, different 

experience levels and backgrounds, 

diverse concepts of courage, honesty or 

quality. D&I is a highly complex topic. If 

The Ernst & Young 

definition of Diversity 

and Inclusiveness 

Diversity is the demographic 

mix in a given environment, 

including differences in gender, 

ethnicity, national cultures, subcultures 

within countries, sexual 

orientation, disability, generation, 

experience levels, social 

backgrounds, etc. The mix varies 

among our areas and sub-areas. 

Inclusiveness is how we 

make the mix work. It is about 

creating an environment where 

all people feel valued, are part of 

the community and are able to 

perform at their best and achieve 

their potential. 

we want to transfer it successfully into 

our organization, we will have to do this 

in strategically sensible steps. 

The base for all activities is the creation 

of awareness and understanding, 

in and across our organization, that D&I 

management is not only morally right: 

Institutionalization of D&I in our value 

system, in our understanding of leadership, 

commitment and behavior, in our 

business and decision-making processes 

and in our market strategies is essential 

to adequately address the needs of our 

people and our clients. 

Building on that base, various agents 

and levels have to be empowered to actually 

work with the concepts, tools and 

methods of effective D&I. In 2009 alone, 

there will be 15 interactive Diversity 

workshops for about 40% of our partners 

across GSA, based on the belief that a successful 

D&I strategy requires a top-down 

approach. Our leaders have to ensure 

that D&I considerations are included 

in our processes, including rotation, client 

assignments, mobility experiences, 

performance evaluation, promotion, etc. 

At the same time, all employees need 

to be addressed. Currently this is done 

via various communication channels, 

with a focus on raising awareness of the 

need to reflect upon one’s own values 

and frame of reference on a day-to-day 

basis. As a next step, D&I skills need to 

be systematically included in the training 

program. An inclusive mindset has to 

become a prerequisite skill for promotions 

and leadership roles. We will build 

this by defining this specific competence, 

the related training, awareness modules 

and self assessment tools. 

We have defined a number of methods 

to measure success, including: 

• analysis of the diversity represented in 

our current partnership and leadership 

roles and the corresponding pipeline, 

• integration of D&I aspects into employee 

surveys and feedback processes, 

• review of turnover, career development 

experiences and promotion within our 

various groups. 

The final goal of these initiatives is not 

only the elimination of discrimination but 

also the comprehensive and sustainable 

management of diversity as an asset that 

creates value for our company, our clients 

and markets and society at large. 



Hope Through Honey 

“Fight poverty, maintain ecological equilibrium and so shape sustainable development.” 

These three clear goals are the essence of this truly mammoth project, Bhusan Shrestha 

says. The large Nepalese beekeeper Gandaki Bee Concern (GBC) wants to make money 

and at the same time bring progress to the small Asian country in the Himalayas. The 

company, founded in 1990 in the capital Kathmandu, wants to do no less than help 

more and more Nepalese “gain a source of income and at the same time conserve the 

quality of nature for the future.” 


To do this, CEO Dev Bahadur Gurung 

employs thousands of yellow-and-brownstriped 

helpers. They buzz over mountain 

meadows, hum in the orange groves of 

the lowlands and circle in thick swarms 

on astonishingly steep cliffs around 

semicircular or circular golden-yellow 

honeycombs. “In all nooks and crannies 

of the country,” GBC announces, 

“we’re promoting honey collection.” For 

Bhusan Shrestha and his boss, this craft, 

which has been exercised for centuries 

on the roof of the world, is the key to the 

economic rise of many small and micro 

enterprises in this region furrowed by 

deep gorges below the Earth’s highest 

summits. Through proper care of their 

bee colonies, the farmers of Nepal shall 

continue to boost the country’s constantly 

growing honey production and 

so earn enough money to support their 

families. Demand for the sweet substance 

is immense and guarantees them 

income with which they can finance 

a better life for themselves. A desired 

side-effect: Since the insects also need 

a clean environment, the farmers also 

pay attention to their most important 

capital: They protect the landscape and 

flora in this mountain country. 

He started his company with a few apis 

cerana hives. Today, most of the honey 

comes from around 1500 apis mellifera 

bee colonies, which produce up to 50 

kilograms per hive per year. Around 

300 tonnes of sweet nectar is the total 

yield of GBC per year, and the business 

has good prospects: One estimate assumes 

there are around 125,000 bee 

colonies in Nepal. “Eight of the world’s 

nine honeybee species are native to the 

country,” notes GBC as it describes the 

fundamentals of this business. At the 

same time, it recognises the challenge: 

“In Nepal, modern beekeeping is still in 

its infancy.” 

The company is working on this. It not 

only collects and processes honey for its 

own sale. GBC now earns money through 

a wide-ranging network of customers, 

including some financially stronger ones 

outside the country. But above all, GBC 

wants to pass on its know-how to the 

country’s farmers and so put beekeeping 

on a broader production footing. To do 

this, it has implemented a seven-step 

procedure, which first identifies suitable 

regions and then potential beekeepers, 

trains them and later provides continuing 

education. GBC helps the farmers 

prepare business plans and write marketing 

concepts. Employees see themselves 

as trainers and helpers, whose goal is to 

build an entire movement of beekeepers 

and honey producers in Nepal. 

And so GBC also relies on teamwork. 

Farmers do not need to act in the market 

alone. Rather, the company forms 

small cooperatives and shares with them 

the essential costs to buy equipment. 

“The cooperatives are the basis to ensure 

that development works,” GBC believes, 

and so it offers training courses for the 

new beekeepers or organises fairs in 

which they can exchange information 

and learn from each other. The focus 

always remains on “practical methods 

and pragmatic approaches”. 

These are especially essential in marketing. 

In Nepal, which has only a few 

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Best Practice 

Human Rights 

paved roads and vehicles, the beekeepers 

often stack the tin cans containing their 

honey onto regular buses to begin the 

sometimes difficult and long trip to the 

market, often in Kathmandu. Here, too, 

the members of a cooperative can help 

each other by dividing up the tasks. This 

saves time and minimises costs. 

“And so we’re increasing honey production 

from year to year,” GBC says about 

its positive results so far. Currently, the 

total amount of honey harvested and 

processed is over 1,500 tonnes per year. 

“The volume could potentially exceed 

10,000 tonnes per year,” the company’s 

specialists calculate. This potential, Dev 

Bahadur Gurung and Bushan Shrestha 

believe, can also be met especially with 

disadvantaged people. The two experts 

argue that beekeeping is not only a craft 

with relatively low capital needs: Honey 

can also be harvested in Nepal throughout 

the year and in almost all locations, 

they underline their business model. 

Thanks to its topography, the tiny country 

is home to many climate zones and 

thus a wide variety of the flora that serves 

as the best basis for producing the most 

varied flavour varieties of honey. 

Dev Bahadur Gurung and Bushan 

Shrestha also know that honey harvesting 

does not require beekeepers to own their 

own land. After all, bee colonies ignore 

property boundaries. “And so especially 

poorer farmers can also take advantage of 

this business,” GBC believes. Even people 

who never learned to read and write can 

raise bees, GBC notes as one of the plus 

points of the assistance project. 

And support for women has been up at 

the top of its agenda even before the company 

became a member of the United 

Nations’ Global Compact in 2000 and 

committed itself to its own CSR policy. 

“Beekeeping is easy work and doesn’t get 

in the way of housekeeping duties,” GBC 

employees say, which is a major advantage 

in giving women their own sources 

of income. The company sees this as an 

important step in reaching its goals of 

reducing poverty and promoting more 

equality in Nepal. “Our membership 

in the Global Compact,” says Bushan 

Shrestha, explaining the GBC’s decision 

to join the UN initiative, “also strengthens 

society’s trust in our actions.” 

GBC then uses this immediately for the 

good of all participants: The company 

simultaneously represents to the Nepalese 

government the interests of the 

small cooperatives’ many beekeepers. It 

takes care of the formalities for certifying 

the honey production as organic and 

maintains contacts with national and 

international authorities or NGOs that 

organise projects with the beekeepers’ 

association of Gandaki Bee Concern or 

that want to sell their products. 

GBC is the nerve centre of the “selffinancing 

network”, as Bushan Shrestha 

proudly calls it. There employees do 

market research, devise new processing 

methods and keep all beekeepers in 

Nepal informed of progress. “Our honey 

market is still being established,” the 

GBC experts say optimistically, “but if we 

continue to improve technologically and 

in management, we’ll soon be competitive 

in the world market.” 


Grundfos 

When water becomes 

sustainable business 

By pairing existing technologies with an innovative business 

model, Grundfos LIFELINK responsibly changes the way of 

operating and managing rural water supply systems. 

By Carsten Kvistgaard 

GRUNDFOS LIFELINK 

An oxcart is bumping along a red, dusty 

road in central Kenya with an empty water 

drum bouncing against the frame. A 

woman and two small boys are walking 

next to it. They have been walking for 

almost an hour when they finally stop 

at a small stone house next to the road. 

Women, children, and a few men swarm 

around the house, many carrying yellow 

plastic cans. 

In the middle of the house stands a 

rectangular black box, almost like an 

obelisk. The woman enters the house, 

picks a small plastic piece from inside 

her dress pocket and places it in a slot in 

the black box. The digital display above 

shows: “credit 0 KSh”. Then she fishes 

out her mobile phone. 

The LIFELINK concept 

The world’s leading pump manufacturer, 

Grundfos, heralds a new era in rural 

water supply. With its newly established 

subsidiary, Grundfos LIFELINK, it targets 

rural communities in Africa, Asia, and 

Latin America with a sustainable supply 

of safe drinking water at affordable 

prices. 

LIFELINK is a business, not a charity. It 

builds upon a combination of pump, 

mobile phone, and mobile banking technologies, 

and it is above all an innovative 

business model that allows consumers 

to pay back into the original system 

investment, simply by paying via their 

mobile for the water they use. 

A LIFELINK System is a single-point water 

supply with a submersible borehole 

pump that is powered by energy from 

solar panels. Water is pumped to an 

elevated storage tank, whereupon it is 

led by gravity to a tap unit in a small 

house. The tap unit also serves as a payment 

facility. 

New habits, new opportunities 

The woman’s fingers dance across her 

mobile phone. First she checks her mobile 

bank account: There is still money, 

even after buying a goat yesterday. She 

types in a few more figures and hits 

“send”. After a few seconds she receives 

an SMS: “100 KSh transferred to Grundfos 

for account AA0093”. She inserts the 

plastic key again to check her balance: 

She now has 100 shillings for tapping 

water. Enough for almost two weeks. 

So she places the water key in another 

slot and water starts flowing though 

a hose to the 200-litre water drum on 

her oxcart. 

A few weeks ago, she had to work hard 

at the hand pump for almost an hour to 

fill her drum. Now she can just relax and 

talk to people. One of them is a small, 

slight man carrying three jerrycans on 

his bicycle. His smile covers the whole 

of his face when he explains that he is 

doing good business: After paying two 

shillings per jerrycan at the water tap, 

he can drive less than half an hour away 

on his bicycle and sell it for 10 times as 

much to people who do not have the 

time or strength to travel a long distance 

to get safe drinking water. By expanding 

this business he will be in a position to 

feed his family. 

Children come from the nearby school to 

fetch water. With three taps on the unit, 

everybody can now fill their canisters 

without waiting, like they did before 

the LIFELINK system – sometimes an 

hour or more. School lessons are not 

affected anymore. 

A pump attendant looks after the system 

and ensures that everybody understands 

how to operate the tap system. He used 

to have a hard time counting people and 

cans and collecting money, but now he 

just needs to assist a few people. He is 

happy: “People now get what they pay 

for – no more, no less. And I don’t have 

46 


Best Practice 

Human Rights 

water revenue, it goes back into the 

community’s own account. 

Facts about LIFELINK and Grundfos 

• LIFELINK is the Grundfos Group’s first step into the socalled BOP market: 

The four billlion people in the world who live for less than two USD per day 

(Base of Pyramid). 

• LIFELINK is business with a responsible approach, closely connected to 

Grundfos’ CSR policy. We call it inclusive business because it creates value 

for both Grundfos and the local communities. 

• A LIFELINK system operates on solar energy and has a capacity of 8-16 m3 

per day. 

• By paying a water tariff similar to officially recommended tariffs, a 

community can pay back a LIFELINK system over 5-7 years. 

• Banking via mobile phones is becoming widespread in the developing world 

because traditional banks are little present in rural areas. 

• Grundfos has a solid record on providing access to water through our well 

tested solar or wind powered pump solutions. Tens of thousands of these 

are working steadily all over the world, from developing countries to remote 

parts of USA and Australia. 

• With such solutions, Grundfos contributes to fulfilment of several MDG’s 

(Millenium Development Goals) in developing countries. 

to explain it to them but can just help 

them instead. It’s great fun.” 

Financial and social sustainability 

The money used to pay for the water 

via mobile phone banking goes into an 

account at the telecompany, where it is 

transferred to the financing bank with 

whom LIFELINK has partnered. After 

deducting the community’s monthly 

loan repayment, the bank transfers an 

amount to pay for a service contract 

between the community and LIFELINK 

to cover service, maintenance, and spare 

parts. If anything is left over from the 

After their repayment of the system investment, 

the community will own the 

system and can invest the water income 

in new development projects. This closedpayment 

system prevents the need for 

cash to be exchanged between people 

and makes the concept transparent so 

that everybody with special interests and 

access – like financing institutions or 

donors – can follow each community’s 

financial and technical performance 

via the Internet. A special surveillance 

facility even makes it possible to see 

how much water is being tapped and 

displays alarms so that LIFELINK’s local 

service organization can take immediate 

action, should any problems arise. Thus, 

the system’s sustainability not only deals 

with environmental aspects by using 

solar energy, but also with social and 

financial aspects. 

The village chief explains: “I had an idea 

that this new water system would attract 

more people to our place. But I am surprised 

that we have been able to almost 

triple our water sales. I have a vision of 

LIFELINK systems in many more communities 

in our constituency because I see 

them as a motor of development. People 

get more time for productive work, cultivating 

and selling crops is much easier, 

and peoples’ health standard improves 

because they don’t need to take water 

from polluted sources.” 

The oxcart woman has filled her drum 

in 12 minutes and is heading home. 

Three other carts have already lined up. 

Women, children, and men come and go 

with jerrycans on their backs, on bicycles, 

donkeys, or wheelbarrows. 

The creaking of the hand pump has 

ceased, replaced by cheerful voices and 

laughter. And while the sun sets behind 

the acacias and pump performance slowly 

fades, the pump attendant can make 

his account: 11 cubic metres. He can lock 

the doors. It has been a good day. 


Holcim 

Collaborating to 

conserve ecosystems and 

biodiversity 

Conserving ecosystems and stopping biodiversity loss is one of the major issues of our time, 

in particular in situations where industrial activities and population growth put increasing 

pressure on natural habitats. Believing that this issue can only be addressed by working 

together, leading building materials company Holcim and IUCN, the International Union for 

Conservation of Nature, have joined forces to effectively manage biodiversity conservation 

and to create biodiversity-based sustainable livelihoods. 

By Stefanie Koch and Rashila Tong 

The production of cement and aggregates 

depends on long-term access to 

raw materials that are acquired through 

quarrying. Being in a resource-intensive 

business has led Holcim to the conviction 

that biodiversity conservation plays an 

important role in its long-term resource 

and reserve strategy. The company plans 

raw materials extraction and management 

according to a defined process with 

impacts assessed at each stage of quarry 

operation. Rehabilitation guidelines and 

plans are implemented by almost all cement 

and aggregate quarries, resulting 

in many conservation and restoration 

projects. 

This and the fact that Sustainable Development 

is a key element of the vision 

and mission of Holcim and integral 

part of business strategy has led the 

company to engage with a respected 

organization to get advice on assessing 

and mitigating its biodiversity footprint. 

IUCN is the world’s oldest and largest 

global environmental organization, with 

more than 1,000 government and NGO 

members and almost 11,000 volunteer 

experts in some 160 countries. IUCN 

works on biodiversity, climate change, 

energy, human livelihoods and greening 

the world economy by supporting scientific 

research, managing field projects, 

and bringing governments, NGOs and 

companies together to develop policy, 

laws and best practice. Given its expertise 

and network, IUCN makes a strong 

partner for Holcim to understand and 

address biodiversity conservation issues 

worldwide adequately. 

Developing company and 

industry relevant 

recommendations 

Given the many synergies between the 

two organizations, IUCN and Holcim 

have entered into a four years relationship 

(2007-2010) that aims at developing 

“robust ecosystem conservation standards 

for the Holcim Group, and contributing 

to sector-wide improvements in the cement 

and related sectors.” In this context, 

IUCN provides biodiversity expertise and 

enables Holcim to work more closely 

with relevant stakeholders internationally 

and locally through its network. In 

placing biodiversity conservation at the 

core of its collaboration, the strategic 

alliance between Holcim and IUCN is 

breaking new ground in the industry. 

A five-member Independent Expert Panel 

of biodiversity and conservation experts 

plays a key role in achieving the ambitious 

targets. The Panel is entrusted to 

develop key elements of a biodiversity 

policy and strategy. In order to advise 

Holcim, the panel has visited several different 

sites in Spain, Indonesia, Belgium, 

Hungary, and the US. These visits ensure 

that before making recommendations, 

the Panel understands the functioning 

of cement and aggregates operations, 

the diversity of sites and the different 

48 


Best Practice 

Environment 

Stakeholder dialogue in Nagarote, 

Nicaragua 

constraints encountered in different locations. 

These visits and the elaboration 

of a baseline of practices in biodiversity 

conservation management of Holcim 

were relevant to understand industryand 

company related biodiversity conservation 

issues. A quarry inventory now 

contains more than 300 Holcim quarries 

and includes examples of conservation 

practices all over the world. 

Creating sustainable livelihoods 

through biodiversity-based 

microenterprises 

Developing biodiversity-based microenterprises 

has the potential to lift individuals 

and communities out of poverty 

while conserving biodiversity. The main 

characteristic of these enterprises is that 

they depend on biodiversity for their core 

business or contribute to biodiversity 

conservation through their activity while 

at the same time providing sources of 

incomes for entire families. The development 

and pilot-testing of an approach 

in selected countries is another focus of 

the Holcim – IUCN collaboration. The 

main actors of microenterprise development 

projects and owners of respective 

businesses are local stakeholders 

themselves. The process of assessing the 

local environment, identifying business 

opportunities and entrepreneurs, equipping 

them with the skills necessary to 

lead a business as well as supporting 

the integration of the businesses into 

the local value chain is facilitated and 

supported by Holcim and IUCN. 

The concept, that will be made available 

to the public, incorporates a variety of 

approaches and key tools for the different 

phases of microenterprise development. 

In Nagarote, Nicaragua, a pilot project 

was initiated in 2008. A working group 

made up of Holcim and IUCN representatives 

and local community stakeholders 

conducted a participatory assessment of 

the socio-economic situation as well as 

available economic and natural resources. 

The team surveyed existing microenterprises 

and identified opportunities 

for biodiversity-related businesses such 

as ecotourism, reforestation and waste 

management. The start-up of businesses 

is foreseen for late 2009. 

Local collaboration in Sri Lanka 

To complement and strengthen the work 

being carried out, local agreements between 

Holcim country operations and 

IUCN are being actively promoted to 

address and resolve site specific issues 

and to support country level implementation 

of Holcim policies and recommendations. 

Such a local agreement has been signed 

between Holcim and IUCN in Sri Lanka. 

One of the projects under the agreement 

includes providing waste management 

solutions for Puttalam, a city near the 

location of the Holcim plant. Recently, 

the construction of a waste sorting facility 

has been completed that will separate 

solid waste into compostable and 

non-compostable fractions. The facility 

can process 7 tons per day, providing a 

waste solution to the community as well 

as compost to the residents. The noncompostable 

fraction is co-processed by 

the plant. Training has been provided 

to the staff and will now be turned over 

to the Puttalam Urban Council for operation. 

This example demonstrates 

how the two organizations functioned 

as a catalyst to improve the local area, 

providing benefit to all. 

The biodiversity efforts of Holcim, in 

particular in collaboration with IUCN, 

are deemed to be respectable as expressed 

in the words of the chair of the Panel 

after the visit to Indonesia: “What we 

saw, heard and experienced was not 

what we had expected – it was on par 

with, maybe even above, what we had 

seen elsewhere”. 

The panel visited the Four Holes 

Swamp adjacent to the Holly Hill, 

US site. 



Kampoeng Djamoe Organik 

Martha Tilaar 

Martha Tilaar Group is one of Indonesia’s foremost purveyors of innovative, high-quality 

beauty products and services. With its wide-ranging stable of sub-brands under the 

Martha Tilaar umbrella brand, the group offers an impressive array of beauty and 

well-being choices for women of all ages and income groups. While many of its products 

and treatments feature the ancient wisdom of traditional Indonesian herbal 

ingredients (jamu) and other natural plant extracts, Martha Tilaar also produces a wide 

variety of up-to-the-minute color cosmetics and skincare, body care 

and hair care products for the modern woman. 

By Nuning S. Barwa and Heru D. Wardana 

From its humble beginnings as a beauty 

salon in the early 1970s, the company 

has grown into an integrated, world-class, 

total beauty provider which exports its 

products all over the world. The company’s 

key brands have won numerous 

prizes and consistently achieved 

the country’s highest ratings for brand 

awareness, reflecting Martha Tilaar’s 

strong focus on beauty products specifically 

designed for the Eastern woman. 

Establishment of ‘Kampoeng 

Djamoe Organik Martha Tilaar’ 

Garden 

As a natural cosmetic producer from the 

beginning, we have always integrated 

socially and environmentally responsible 

practices into our business activities and 

blended Indonesian medicinal plants, 

Eastern beauty, our rich culture and 

environment together in our mission. 

The three pillars of our corporate social 

responsibility focus on environmental 

and cultural stewardship, caring communities, 

and empowering women’s 

wellness. 

In 1998, the company established the 

10-hectare garden located in Cikarang 

industrial estate, West Java, which was 

conceived and developed by Dr. Martha 

Tilaar as a result of her total dedication 

to preserving Indonesian biodiversity, 

especially in medicinal, aromatic and cosmetic 

(MAC) plants. The main objective 

is to serve as a center for environmental 

and cultural education and a holistic garden 

that enhances our physical, spiritual 

and moral balance. 

Since the garden’s land is very marginal 

and dry, it took extra effort and dedicated 

commitment by our team for more than 

5 years in applying good organic agriculture 

principles to transform it so it could 

be planted with grass, trees, and MAC 

plants. Finally, after 8 years of hard work, 

the sustainable launch of Kampoeng 

Djamoe Organik (KaDO) was celebrated 

by Indonesian Environment Minister Ir. 

Rachmat Witoelar in June 2006. 

As an Indonesian company producing 

herbal and natural cosmetic products, 

we obtain our herbal materials from the 

local community and farmers in Indonesian 

provinces. Through partnerships 

with local farmers to provide high-quality 

plant materials, we can secure their supply 

to meet our needs all year round. For 

the time being, we always check farmers’ 

activities in cultivating the medicinal 

plants to produce simplisia (dried plant 

materials). It is important to supervise 

them at every step of plant cultivation 

and post-harvest treatment to achieve a 

high standard quality of plant materials. 

To efficiently and effectively transfer 

knowledge of good agricultural practices 

as well as good post-harvest practices 

50 


Best Practice 

Environment 

to farmers and the local community, 

we have also established in ‘Kampoeng 

Djamoe Organik’ complete training facilities 

for organic farming and post harvest 

treatment of MAC plants. 

Green mission of ‘Kampoeng 

Djamoe Organik Martha Tilaar’ 

Training in organic farming has been 

conducted since 2001, when we started 

giving free training in organic farming 

and simple production management 

to 20 cooperative farmers throughout 

Indonesia. In 2003, we also published 

a book on the organic farming system 

for Indonesian “empon-empon” (in the 

Zingiberaceae family, like ginger, Javanese 

turmeric, galangal). Our goal is to 

ensure that the organic plant cultivation 

system is being effectively implemented 

to support the supply chain process and 

conserve original Indonesian seeds and 

plant diversity. We then began to work 

with the Indonesian Agriculture Minister 

and Indonesian NGOs to conduct training 

on the organic farming system and 

good post-harvest practices for medicinal 

plants and promote them in Indonesia 

through printed and electronic media. 

Now we already have more than 200 cooperative 

farmers from Aceh to Papua. 

We have been collecting plant species 

from their habitats one-by-one since the 

year 2000, so we now have about 600 species 

of Indonesian MAC plants. Moreover, 

‘Kampoeng Djamoe Organik’ was planned 

as a green area in downtown Cikarang 

and to serve as a carbon trap and oxygen 

factory for the community. All program 

activities here are designed to achieve 

spiritual, physical and moral balance. 

These include training in organic farming 

and post-harvest treatment, agent 

development for green actions, rising 

awareness of global warming, herb-use 

training for healthy living, outdoor activities, 

promotion of the community’s 

green products, fun-learning for children 

and life-enhancing programs for senior 

citizens. 

We use this holistic garden based on 

organic precepts as a center for environmental 

education to enhance the balance 

of mind, beauty and behavior. Through 

‘Kampoeng Djamoe Organik’, we are trying 

to improve the quality and beauty of 

the environment through the collection 

of MAC plants and by spreading a new 

concept of agriculture through educational 

activities and natural relaxation. 

We are also endeavoring to conserve 

Indonesia’s biodiversity by applying winwin 

solutions for all stakeholders and 

the environment itself. 

In the long term, ‘Kampoeng Djamoe 

Organik Martha Tilaar’ has provided a 

beautiful and pleasant environment in 

the heart of Cikarang city with high added 

value in supporting the agrobusiness 

of MAC plants and ultimately stimulating 

the birth of “Environmental Heroes” 

in urban and industrial areas. There 

are so many benefits offered to visitors, 

such as fresh air in a green garden in 

the center of the city, relaxation, and 

education as well as broader knowledge 

about MAC plants and their uses. Next, 

the garden will also host an Eastern 

Spa, herbal laboratory, and School for 

Nature that will make this area a ‘Health 

Care & Education Center’, providing a 

traditional touch with modern nuances 

while serving as a hospitality host for 

global consumers. 


Medine 

Master Plan for 

Mauritius 

Established on the island of Mauritius in 1911, Medine originally grew and processed 

sugar cane. But since then, the importance of tourism and other service areas has steadily 

grown. The ‘Fondation Medine Horizons’ (FMH), which the company established for this 

purpose, promotes optimism and entrepreneurial self-help, states the GC report “Africa 

leads”. 


52 


Best Practice 

Partnership 

“Development,” says Dany Giraud, “can 

only be sustainable, in our opinion, if all 

the people of a region participate and enjoy 

the advantages of change.” The CEO 

of Medine, a conglomerate of companies 

in the holiday paradise Mauritius, has 

also been the driving force of the FMH 

since 2006. The Group established the 

foundation, funded by 10 million Mauritian 

rupees (€0.24 million) annually, in 

accordance with its master plan. 

The plan paints a picture of the future for 

the people living on the 10,625 hectares 

of land belonging to Medine. The vision 

promises them lives based on education, 

good jobs and social services. After all, 

the area in which the FMH works covers 

a good 5.5 percent of the entire island, 

which is located around 900 kilometres 

east of Madagascar in the Indian Ocean. 

About 15,000 islanders live in the area 

around the cities of Richelieu, Tamarin 

and Bambous. 

The company’s managers reacted early 

to changes in the world market and 

diversified their product portfolio. And 

so the company also plants vegetables 

and farms chickens among other projects. 

Employing over 1700 people, Medine 

also operates luxurious holiday resorts, 

nature parks and golf courses for wellto-do 

tourists. Medine’s CSR activities 

played a major role here. And so, consistent 

with this, FMH was founded in 

September 2006. The main goals of the 

master plan are to improve education 

and employment and promote entrepreneurship. 

Six employees transferred in 2006 from 

Medine to the newly established FMH. 

There, Sophie Desvaux de Marigny has 

steered teachers, social workers or organisers 

of the farmers’ market as well as 

financed microcredit to small businesspeople. 

“All our projects have the same 

goal,” says Sophie Desvaux: “We are 

integrating the poor into the economy 

of our region.” Since December 2007, the 

foundation has also been working with 

small companies. It provides them with 

small loans of between 950 and 31,250 

US dollars (750 – 25,000 euros). These 

jump-start loans give the recipient companies 

a leg up and stabilise the island’s 

economy. In the current and coming year, 

FHM is putting a special focus on the 

fight against drugs. Mauritius has the 

world’s second-largest heroin market 

in relation to its population, so this is a 

worthwhile project for the foundation. 

One of the fortunate beneficiaries of 

the foundation’s work is the tinsmith 

Seeven Seevathean. One of the last of 

his trade, the craftsman cuts, hammers 

and solders tanks, pails and cans under 

the corrugated metal roof of a wood 

hut in the provincial town of Bambous. 

Seevathean sells his wares at a stand 

beside the Royal Road, and his customers 

stream to him from far away. To expand 

the small company and boost production 

with new machines, he needed capital. 

Seevathean is a good businessman, and 

FMH credit expert Benoit Adolphe did not 

hesitate long before fulfilling his wish in 

December 2008. Adolphe granted him a 

125,000 rupee loan (€2000), repayable in 

small instalments over three years. The 

tinsmith was happy and immediately 

hired an additional worker. 

“Seevathean is a prime example of our 

work,” comments foundation employee 

Benoit Adolphe. “We help him to help 

others.” The tinsmith stands symbolically 

for at least 200 untrained unemployed 

people whom the foundation helped gain 

basic knowledge and technical skills in 

its specially constructed Medine Training 

Centre (MTC) between autumn 2006 and 

2008. Jean Marc Boissezon taught them 

reading and writing, and in the Centre 

they received basic training in home economics, 

child care or gardening. Today 

they work as domestic servants, hotel 

employees or landscapers. These professions 

are in demand in the region, and 

a job guarantees income. “That changes 

the social structure of society,” concludes 

Priscille Ramcharran, who works as a 

social worker at FMH. Alcohol and drug 

addiction, dropping out of school, unemployment 

and teenage pregnancy have 

long been a sad part of everyday life in 

the holiday dream island in the Indian 

Ocean. “Exactly that is what our master 

plan intends to change,” says Sophie 

Desvaux de Marigny. 

Not only has FMH supported 97 local 

NGO actions with around 15 million 

rupees (€365,000); most of all, it has 

trained the unemployed. “That provides 

families with an income,” says Sophie 

Desvaux proudly of this work. In a 150- 

hour course, FMH trains people to work 

in hotels. Some holiday resorts on the 

west coast of Mauritius cooperate intensively 

with the foundation and provide 

the trainees practical experience “on the 

job”. The operations of Medine also profit 

from the foundation’s work. They recruit 

their employees from the reservoir of 

the previously untrained. 

In 2007, Medine signed the Principles 

of the Global Compact. “Since then,” 

concludes the GC report “Africa leads” 

of 2008, “Medine and the foundation 

have spread optimism and entrepreneurial 

self-help.” With this they have 

also reached people who were previously 

left behind. Medine gives land to 

citizens’ action groups, builds nurseries 

and homes for the handicapped. “The 

foundation sets an example in all its 

activities,” Medine CEO Dany Giraud concludes. 

“We show how people, through 

their commitment, build and strengthen 

neighbourhood structures in which everyone 

suddenly helps to improve living 

conditions and gain access to social assistance 

and good jobs.” 


Nexen 

Yemen Water and 

Sanitation Project 

Is it possible to create a sustainable water and sanitation infrastructure project? 

Yes, but corporations and international organizations, such as the United Nations 

and its agencies, are still learning to work together. And it is paramount to 

effectively engage the community if such projects are to be successful. 

By Jeff Flood 

Nexen Inc. is a Canadian-based, global energy 

company growing value responsibly. 

We are strategically positioned in some 

of the world's most exciting regions: the 

North Sea, deep-water Gulf of Mexico, 

Middle East, offshore West Africa and 

the Canadian Athabasca oil sands. 

Yemen has been a significant international 

region for us since we first began 

production at Masila in 1993. We operate 

the country’s largest oil project and have 

developed strong relationships with the 

government and local communities. 

Yemen is one of the most water-scarce 

countries on earth. Small communities 

in Yemen have very limited resources 

for water and sanitation. When Nexen 

considered options for community investment 

that would make a sustainable 

difference to local residents, water was 

a natural area of focus. 

The community of Ressib is the settlement 

closest to our Central Processing 

Facility. From the outset, Ressib has been 

one of our key areas for community investment, 

with Nexen providing support 

for electricity, drinking water, health and 

education as priorities. 

54 


Best Practice 

Partnership 

As an active member of the UN Global 

Compact, we began looking for ways to 

partner with the UN and its agencies to 

address development-related issues, such 

as the Millennium Development Goals. 

After a period of consultation, we undertook 

to create a sustainable community 

development project in concert with the 

United Nations Development Programme 

(UNDP), with additional support from the 

Canadian International Development 

Agency (CIDA). This was one of the first 

partnership projects announced under 

the Global Compact and the first to be 

launched in the Middle East. 

Our mutual objective was to establish 

a clean water and sanitation program 

in the community of Ressib to enhance 

local quality of life by reducing incidences 

of water-borne diseases. To help 

us achieve those objectives, we launched 

a project to: 

• provide a long-term source of quality 

water for drinking and domestic use 

(local water wells showed moderately 

excessive levels of fluoride); 

• develop a locally appropriate sanitation 

and wastewater management system; 

and 

• build community capacity to sustain 

the water and sanitation systems. 

The project was approved in October 

2004 with the UNDP as the implementing 

body. We had hoped to complete 

the effort within three years. In truth, 

we have not achieved the goals we set 

for ourselves within the hoped-for time 

frame. The project is continuing and is 

now targeted for completion by yearend 

2010. 

There are several reasons for the project 

failing to meet our initial expectations: 

• The organizational cultures of the 

UNDP and Nexen were substantially 

different. The culture of an oil and gas 

company is less concerned with internal 

processes than a UN agency must 

be. For example, the steps required to 

approve materials procurement were 

significantly more detailed – and time 

consuming – than Nexen expected. 

• Thanks to multiple community investment 

efforts by Nexen over the years, 

the community (Ressib) has come to 

expect a “full service” project, with 

Nexen funding, installing and in some 

cases maintaining essential community 

infrastructure. The community has not 

fully embraced the concept of owning 

and managing the water and sanitation 

project themselves. 

• The security situation in Yemen has 

deteriorated since the project’s outset. 

This has limited the ability of UNDP 

staff to travel to, and spend time in, 

the community. 

Originally, the project was estimated at a 

cost of US$2 million, with US$1 million 

coming from Nexen and US$500,000 

coming from the UNDP and CIDA (each). 

With the lag in the project schedule, we 

now expect actual costs will exceed our 

original budget by about 25%. 

In early 2009, Nexen met with the UNDP, 

the Government of Yemen and community 

leaders. Together, we celebrated 

the fact that clean drinking water has 

now been provided to some 700 households, 

serving a population of about 

5000 people. 

By mutual agreement, Nexen agreed to 

complete the sanitation system (to be 

built by a local contractor) and to also 

support the local community in developing 

the capacity to own and manage the 

completed system. 

We are confident the project will ultimately 

achieve its goal of enhanced quality 

of life for the community of Ressib 

through successful completion of the 

water and sanitation project. But given 

the substantial delays in the project, it is 

important for us to capture the lessons 

learned, not only for ourselves but for 

other private/public partnerships such 

as ours. 

So what have we learned? 

We’ve learned not to underestimate the 

cultural differences between corporations 

and international organizations 

such as the UN and its agencies. While 

we both share the goal of sustainable 

development, our approaches to achieving 

that goal can differ substantially. It is 

important to recognize and deploy the 

skills and competencies of the project 

partners in the most effective manner 

right from the outset of the project, and 

to allow for adjustments as project conditions 

change. 

We’ve learned that sustainable infrastructure 

programs require long-term 

commitment from the community and 

the resources, will and education to see 

them through. The community must 

establish a clear champion and commit 

to an education program. 

Perhaps most importantly, we’ve learned 

an important difference between oil 

and gas infrastructure and community 

infrastructure. As a global oil and gas 

company, we have proven to be adept at 

drilling wells, at building roads, pipelines 

and processing facilities – all despite 

significant challenges in terrain, climate 

and culture. But when it comes to 

partnering with international agencies 

and developing community capacity to 

manage their own infrastructure, we’ve 

come to appreciate the complexities 

involved. 

On our part, we’ve learned valuable lessons 

we hope other private-sector players 

can study. We also hope that, from our 

experience, the UN, its agencies and the 

UN Global Compact can learn how to 

partner more effectively with companies 

such as ours. 


Novo Nordisk 

Changing 

Diabetes® 

By Craig Ludwig 

Protecting and promoting the right to 

health is first and foremost a responsibility 

of states. But business can make a big 

difference. Novo Nordisk is committed 

to pursuing its business goals as a profitable 

enterprise. However, as a global 

pharmaceutical company and a leader 

in diabetes care, we believe that we have 

a responsibility to try and influence the 

negative trends of this global health issue 

to prevent unnecessary human suffering. 

That is why we launched Changing 

Diabetes® in 2005, which is dedicated to 

bringing meaningful change to the lives 

of people living with diabetes. This promise 

underpins the company’s strategy in 

diabetes care and three ambitions drive 

its efforts: giving priority to people with 

diabetes, improving treatment outcomes, 

and breaking the curve of the global 

diabetes pandemic. 

There are 3.8 million deaths attributed to diabetes each 

year, accounting for roughly 6 percent of total causes of 

mortality globally. Yet the disease still goes largely ignored. 

Of the estimated 246 million people worldwide who are 

affected by diabetes today, 50 percent do not even know 

they have it. Diabetes is a global issue and presents a 

significant challenge to both the individual and society. 

In low- and middle-income economies, governments 

lack the resources to provide the health care that their 

populations need, and in high-income economies, ageing 

populations – combined with increased treatment costs – 

are putting public health budgets under pressure. 

To improve the lives of people affected 

by diabetes, change needs to happen at 

every level – in science and research, 

in humanitarian and outreach efforts, 

in education, and in government and 

public policy worldwide. This ambition 

poses huge challenges that require collaborative 

actions. 

Giving priority to people 

with diabetes 

The importance of raising awareness of 

diabetes led Novo Nordisk to become a 

strong partner in the Unite for Diabetes 

campaign, which led to the adoption of 

the 2006 UN Resolution on diabetes. The 

resolution calls upon all nations to tackle 

the growing diabetes pandemic. 

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Best Practice 

Human Rights 

In March 2007, Novo Nordisk gathered a 

wide range of stakeholders at a forum in 

New York to discuss how to put the resolution 

into action. The keynote speaker 

at the forum was former US President 

Bill Clinton, who stated: “We will never 

be forgiven, and I mean never, if we 

allow our children to live shorter lives 

than our own.” 

To date, 16 such national forums have 

been arranged in countries across the 

world, including Australia, Belgium, 

Denmark, Italy, and France. The forums 

aim to put diabetes on the health policy 

agenda and offer an opportunity to drive 

change on the ground through discussions 

about national diabetes strategies, 

improved diabetes prevention, and early 

detection of diabetes. At these forums, 

participants debate how to develop sustainable 

health policies and design health 

systems that generate value-based outcomes 

for people with diabetes. 

Improving treatment 

The effects of this devastating dis

Global Compact International Yearbook 2009

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