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Corporate social responsibility

Accounting for Sustainability: Here Be Dragons

Did you ever think you’d hear one Dragon suggesting to another that they should share a bath to save the planet?

I haven’t been to a music festival for – literally – decades, and the first part of this video made me smile: not only because of the apparent incongruity of Dragons and the background setting, but also with nostalgia. Though my thought pattern now was more about the effort that was involved in packing, transporting and unpacking the banners, bunting, mats, carpets, tents, blankets and cushions, delightful though they look… today’s camping style is much more pragmatic.

 

 

Sainsbury’s has announced that it will be the first retailer to fully integrate its corporate responsibility and financial performance in its 2011 annual report. They already issue CR updates with their quarterly reports; this is an interesting next step. Their annual reports come out in early June: one to look out for.

This video was made in support of HRH Prince Charles’ Accounting for Sustainability initiative, which was set up back in 2004: Sainsbury’s worked with Abbott Mead Vickers on the creative idea, and with the team at Accounting for Sustainability to identify the companies to join them on the video.

I thought it entertaining – and very brave of Deborah Meaden and Theo Paphitis to take on acting roles.

Sustainability accounting does seem to be gaining some traction. A few resources in this area include:

Do watch the video to see dragons as you’ve never seen them before – and to play ‘spot the CEO’ in the second half.

Cynicism or Reality in Australia? | CSR Around The World

GoPro SurfingAustralia is something of an anomaly. Pitched in the south western corner of the Pacific Ocean it’s about as geographically distant from Europe as you can get, yet culturally it’s much closer than many Aussies would care to admit.

For sure there’s the classic image of an ocker Aussie slinging a couple of shrimps on the barbie in between surfing expeditions to Bondi Beach on Christmas Day.  But is there really that much difference between Australia and the UK?

After all, said chap will probably also be found in a bar, beer in hand, cheering on his favourite sporting team with passion and fervour, in between throwing casually light sexist comments to his mates.  Sounds like a typical Sun reader to me (for non-Brits, The Sun is the most popular paper in the UK).

This is by no means to typify all our antipodean cousins as ocker, nor to typify all Sun readers as casually sexist (ahem!).  However, when you consider that the Australian economy relies more on its close neighbours such as China, Japan and Thailand .. you can start to see where I’m coming from.

If there is one characteristic which does make Australia stand out from the New World, it’s confidence.  Those darned Aussies are just so darned competitive.  We’ve had the Ashes going on over the last few weeks and recently England actually managed to beat the Wallabies on the rugby field.  We’ll be given hell in return, you bet!

The Aussies are natural leaders in just about anything they care to lay their hands on, so has this competitive, confident, almost aggressive take on European culture translated into CSR?

Well, apparently not. [Read more…] about Cynicism or Reality in Australia? | CSR Around The World

A Rabbit Warren of Brazilian Banking CSR

Come Into The Rabbits Hole trimManagement & Excellence is what I can only describe as an intriguing and unique company.  Their website describes them as:

a research and rating company in the areas of ethics, sustainability, corporate governance, transparency and corporate social responsibility (CSR) specialized in Latin America, Spain and the oil industry worldwide

The company recently released the results of their 2010 “Most Sustainable Latin Bank” survey (PDF).   And the winner is (for the SIXTH year running!) Itaú-Unibanco.

This is no surprise.  Itaú-Unibanco is the largest Brazilian bank and one of the top 500 companies in the world, maintaining a presence not just in Latin American but also the US, Japan, Hong Kong, the UK and the UAE.  It’s no Merrill Lynch, but neither is it a small town squib.

But how can you examine its exceptional sustainability record online?  Only through digging, it would appear. [Read more…] about A Rabbit Warren of Brazilian Banking CSR

United Nations Principles on Business and Human Rights | An Introduction

An example page, showing discussion and
agreement at the bottom. Click to enlarge.

Last week, the United Nations Special Representative on Human Rights, John Ruggie, released the draft “Guiding Principles for the Implementation of the UN ‘Protect, Respect and Remedy’ Framework” for consultation.

Businesses and stakeholders have the opportunity to comment on them up until the end of January 2011, after when they will be prepared for formal presentation to the UN Human Rights Council later in the year.

The framework contains 29 principles which rest on three foundations:

  • the state’s duty to protect human rights
  • business’ responsibility to respect human rights
  • free access to meaningful remedy where breaches occur

The full document can be read in PDF format here, or viewed online here.  The online representation doubles up as a forum, with registered users able post comments after each principle which other users able to rate as relevant and show their agreement (or disagreement).

This is a rather neat and straightforward way of collating opinion and I hope other consultations take note!  Real respect to the University of Western Ontario, whose fourth year design students are apparently responsible for it.

For your convenience, here’s a potted summary of some of the most important statements:

Principle 5: governments should encourage and where necessary require businesses to respect and report upon their human rights activities; they should not presume that businesses prefer or benefit from state inaction

Principle 10: governments should be prepared to withdraw public support from businesses involved in gross human rights abuses if they fail to address the situation

Principle 11:  multilateral institutions (eg. the IMF) should not constrain governments’ ability to act on human rights and should use these guidelines to foster mutual understanding between their members

Principle 12/13: businesses should have in place appropriate policies and process based (as a minimum) on the International Convention on Human Rights and the International Labour Organisation’s core conventions

Principle 14: businesses’ commitment should include approval from the most senior level of the organisation, be communication to all staff, partners and stakeholders and make clear the company’s expectations of staff and partners alike

Principle 15/16/17: businesses should have a due diligence process ongoing which will identify human rights risks and impacts and feed these into standard decision making processes

Principle 18/19: businesses should track their human rights performance and be prepared to discuss their record publicly with relevant stakeholders

Principle 23/24/25: governments have to ensure that human rights abuses in their territories are met with effective and enforceable judicial and non judicial remedies and mechanisms

Principle 27/28: businesses should establish grievance mechanisms for communities who may be adversely impacted by their operations and participate in cross industry and multi-stakeholder initiatives

All in all there’s nothing too shocking in these guidelines although there are a few places where the information provided needs to be finessed.  Generally speaking, it can be assumed these Guidelines will go forwards as presented.

This also presents a golden opportunity for businesses to steal a march on their competitors and build new functionality into their websites.  Not just to report their human rights record, but also to collate information and participate in collaborative schemes.

Sustainability, Brittany and Corporate Greed

Three_little_pigs_-_third_pig_builds_a_house_-_Project_Gutenberg_eText_15661Once upon a time there were three little piggies, and their names were Flopsy, Mopsy, Cottontail and Peter.  And they lived with their crotchety old grandmother underneath the mushroom at the bottom of your neighbour’s garden.

Well, as the start to a fairy tale it has some merit, even if it lacks a certain originality.  Still, it’s more believable than “once upon a time, all companies traded fairly and equally with one another in a society based upon values rather than status.”

And then, so this fairy tale goes, the Big Bad Wolf came along and-he-huffed-and-he-puffed and he destroyed this value based society by pointing out that if you were mean, mendacious and plain greedy you could make more money than your competitors.

This is the fairy tale that those who advocate compulsory sustainability and CSR measures would have us believe.  But are they right?

[Read more…] about Sustainability, Brittany and Corporate Greed

Mandatory sustainability measures: a digest

PounceLike spring follows autumn or cats pounce on mice (even under the snow!), now seems to be the season for people to discuss mandatory supra-national reporting standards.  Without going into too much detail, here is a selection of last week’s activity for you to peruse at your leisure.

EU may legislate on corporate, social and environmental data

This story was reported by Responsible Investor (RI).  In effect, the EU is keeping the door open for future ESG legislation, but the period within which any decision will be made is rapidly narrowing.

In May 2010 the European Parliament passed the resolution “Delivering a single market to consumers and citizens”.  This highlighted “the importance of establishing a green single market for emerging low-carbon and environmental technologies, services and products” and insisted that “the use of conformity assessments to gauge social environmental and economic impact at both EU and national level” should be ensured.

The European Commission, the EU’s executive, broadly agrees with this opinion and describes the need for a Single Market Act as urgent.  Consequently, it now aims to have a Single Market Act passed and implemented by the end of 2012 with a draft scheduled for publication in early 2011.

Of further note in the RI article the report the commission is considering a review the status of “foundations, corporative societies and mutual associations”.  If the EU were to start to legislate to put these forms or corporation on even an equal footing as traditional businesses it would change the ESG dynamic overnight.

Full disclosure of SRI data “would boost the market”

This story comes from CityWire, an independent publication a quarter owned by Reuters, and reports on the views of the European Sustainable Investment Forum (Eurosif).

Matt Stevens, Eurosif’s executive chairman, is quoted as saying “A purely voluntary disclosure scheme does not guarantee significant, relevant and comparable data from all issuers.”.

However he is at least partially contradicted by Steve Waygood, former Chair of UKSIF, who says “I am not convinced that the potentially ossified regulatory hand on all issues is the right one .. (however) .. there is definitely a need for much better guidance on what should be disclosed”.

In his role as Head of Sustainability at Aviva Investors, Waygood prefers the approach of asking stock markets to make ESG part of their listing criteria.  While not regulatory, this is still a form of mandatory ESG disclosure.

Are businesses ready to accept more carbon legislation?

Yes, is the surprising answer from Carbon Guerilla’s chairman Les Hayman, as reported by Business Green.

Hayman believes many companies are tapping into carbon accounting as a way of lowering costs and cites an example of someone who chews through up to £40/day in carbon credits purchased from a mobile phone provider.

He says: “I think governments are only just starting to realise that this area is an incredible one for taxation, and one that allows them to look like really good global citizens.”

The idea of carbon allowances for individuals and corporations isn’t not a new one but unfortunately, and unwittingly, Hayman also points out the flaw in such schemes.

“Think of carbon as a debit or credit card, so you spend something you have or something you pay for in the future,” he says. ” (This)  makes people aware that it’s a limited commodity like currency.”

Except currency isn’t a limited commodity, as fans of quantitative easing will all too happily point out.

The accountants are coming

Sustainability reporting is often linked with financial reporting because, as George Monbiot recently said, “the way in which nature is being squeezed into a column of figures in an accountant’s ledger .. may be necessary. What else will induce the blinkered, frightened people who hold power today to take the issue seriously?”

With this in mind there are there’s one other story which is worth keeping an eye on.

The US SEC is considering the adoption of the International Financial Reporting Standards (IFRS) as a replacement for the Generally Accepted Accounting Principles (GAAP) and will continue to report upon measures required throughout 2011.

In the meantime, IFRS is already the norm in the EU & South Africa and will be integrated into accountancy rules in India, Russia, Japan and Canada from 2011.

Although an agreement on accountancy rules between erstwhile competitors such as the US, Russia, the EU and India will be unprecedented, such worldwide agreement will make the integration of sustainability concerns into financial calculations much easier.

Picture Credit: Pounce! by photofarmer under Creative Commons Attribution License.